Rogers-Shaw deal deadline extended for fourth time pending final approval
Canada’s Rogers Communications on Friday extended the deadline for its C$20 billion merger with Shaw Communications for the fourth time to March 31 as the companies await the final nod from industry minister Francois-Philippe Champagne.
The deal to create Canada’s No. 2 telecoms company was previously expected to close on Feb. 17 following a successful end to the long-drawn battle with the competition bureau for approval.
The bureau’s biggest concern was the deal would lessen competition in a country where wireless bills are already among the highest in the world.
To address the issue, Rogers and Shaw agreed to sell Freedom Mobile, a wireless business owned by Shaw, to Quebecor Inc for C$2.85 billion ($2.11 billion). That deal is now expected to close by March 31.
Champagne’s approval is needed to transfer spectrum licenses of Shaw’s Freedom Mobile unit to Quebecor’s Videotron. The minister has previously expressed support for the deal if certain conditions were met.
When approving the deal in December, Canada’s antitrust tribunal had said Videotron would be able to profitably bundle its services at prices below what Shaw was offering.
The deal for Shaw would also increase the intensity of competition in Alberta and British Columbia, where Rogers sought to strengthen its footing after the acquisition, the tribunal had added.
“As indicated previously, ISED will render a decision on the proposed Freedom-Quebecor spectrum licence transfer in due course,” said Innovation, Science and Economic Development Canada, which Champagne heads.
Shares of Rogers were up 0.2% on Friday, while Shaw fell 0.4% and Quebecor shed 1.7%.
“We remain surprised by not only the length but also the cost (over $825M) to the companies and government of the regulatory review process,” National Bank of Canada analyst Adam Shine said. US News