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Canada slaps curbs on Rogers' remedy offer to win $14.7 billion Shaw purchase

Stock Markets Oct 25, 2022 09:25PM ET
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© Reuters. FILE PHOTO: Ethernet cables are seen in front of Rogers and Shaw Communications logos in this illustration taken, July 8, 2022. REUTERS/Dado Ruvic/Illustrations
 
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By Divya Rajagopal and Dan Whitcomb

(Reuters) -Canada on Tuesday imposed conditions on Rogers (NYSE:ROG) Communications' proposed remedy to overcome competition bureau concerns about Rogers' planned C$20 billion ($14.7 billion) purchase of rival Shaw Communications (NYSE:SJR).

Rogers has offered to sell Shaw's Freedom Mobile unit to Quebecor Inc's Videotron to allay the antitrust bureau's concerns over reduced competition in the Canadian market following the Shaw deal.

Canadian Industry Minister François-Philippe Champagne told a media conference on Tuesday that Videotron would be required to hold the Freedom Mobile unit for at least 10 years.

"Second, I would expect to see prices for wireless service in Ontario and Western Canada comparable to what Videotron is currently offering in Quebec, which are today on average 20% lower than in the rest of Canada," he added.

Champagne also said the government has formally rejected the wholesale transfer of wireless spectrum license from Shaw to Rogers under the original deal.

Champagne's announcement at a news conference came days before the companies go into mediation at the Competition Tribunal regarding the takeover. Canada Competition Bureau has said the sale of Freedom Mobile to Videotron is not sufficient to overcome its concerns about market concentration. But Champagne has the final say on the deal.

"Given the ongoing proceedings, we will decline to comment at this time," Rogers said.

Quebecor welcomed the conditions stipulated by Champagne and said it will incorporate those into the new version of the Rogers-Shaw, Quebecor-Freedom Mobile transaction.

"We are pleased to see that Minister Champagne recognizes and supports the highly competitive environment created by Videotron in Québec's wireless market over the past several years," Quebecor Chief Executive Officer Pierre Karl Peladeau said in a statement.

Rogers first announced the purchase of Shaw in 2021, but Canada's competition bureau blocked the deal saying it would lessen competition in a market where wireless bills are among the highest in the world.

"Canadians deserve world-class networks, and access to wireless services at affordable and competitive prices. I am resolved to achieve these objectives, full stop," Champagne added.

($1 = 1.3619 Canadian dollars)

Canada slaps curbs on Rogers' remedy offer to win $14.7 billion Shaw purchase
 

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