Rogers Communications Inc. and Shaw Communications Inc. have agreed not to close their $ 20 billion deal until antitrust issues are resolved, and said they are working to negotiate to address Canadian regulators’ concerns.
The companies agreed to a temporary ban on completing the merger. This eliminates a possible scenario – they try to close the deal and then get involved in a protracted legal battle with the Canadian Competition Bureau, which is trying to block it.
Instead, Rodgers and Shaw will either have to negotiate an agreement with the bureau or win it in an expedited hearing at the Competition Tribunal, a body similar to a court hearing antitrust cases. The side deal with the competition authority “allows the parties to focus on addressing the commissioner’s concerns about the deal in order to reach an agreement,” Rodgers and Shaw said in a press release Monday.
Toronto-based Rodgers is trying to acquire Shaw for $ 40.50 per share in one of the largest mergers in Canadian history. The company tried to resolve the antitrust complaints by selling Freedom Mobile’s Shaw division to a suitable buyer, but the bureau said it was an inadequate solution to maintain competition.
“As part of an agreement to be registered with the Tribunal, Rodgers also agreed not to impose any condition in its agreement with Shaw or any other agreement entered into in connection with the proposed merger that limits Shaw’s ability to operate, maintain, improve or expand your wireless business, “said a statement from the Competition Bureau.
The antitrust agency filed a lawsuit to block the proposed acquisition in early May, saying it was worried consumers would “likely pay higher prices” after the deal.
The regulator claims that “the elimination of Shaw as a competitor threatens to undo the significant progress it has made by introducing more competition in the already concentrated wireless market”, where Rodgers, Telus Corp and BCE Inc. serve about 87% of Canadian subscribers.
Add Comment