(Reuters) - Canada's Commissioner of Competition intends to oppose Rogers (NYSE:ROG) Communications Inc's proposed C$20 billion ($16 billion) merger with Shaw Communications (NYSE:SJR) Inc, the companies said in a statement early Saturday.
The Commissioner of Competition notified the companies on Friday afternoon of its intention to file applications to the Competition Tribunal opposing the merger.
The companies have proposed full divesture of Shaw’s wireless business, Freedom Mobile, to address concerns regarding the possible impact of the merger deal on Canada’s competitive wireless market.
"Rogers and Shaw are engaged in a process to sell Freedom Mobile, with a view to addressing concerns raised by the Commissioner of Competition and ISED," the companies said in the statement, adding that they remain committed to the merger.
Rogers announced last year that it was buying Shaw in a deal that would create Canada's second-largest cellular and cable operator, however, investors and analysts believed that regulatory risks were imminent.
Meanwhile, the Globe and Mail reported on Friday that Rogers has asked telecom company Quebecor Inc to join a bid for Shaw's Freedom Mobile.
Rogers declined to comment on the Globe and Mail report.
($1 = 1.2905 Canadian dollars)