Rogers and Shaw apparently got some bad news on Friday night. Apparently the Competition Bureau dialled them up and let them know that their proposed merger was going to be opposed by them. Rogers put out a press release that among other things said this:
Rogers Communications Inc. (“Rogers”) and Shaw Communications Inc. (“Shaw”) were notified this afternoon following the close of trading of the Commissioner of Competition’s intention to file applications to the Competition Tribunal opposing Rogers’ proposed merger with Shaw (the “Transaction”).
Rogers and Shaw remain committed to the Transaction, which is in the best interests of Canada and Canadians because of the significant long-term benefits it will bring for consumers, businesses and the economy. The companies have offered to address concerns regarding the possible impact of the Transaction on Canada’s competitive wireless market by proposing the full divesture of Shaw’s wireless business, Freedom Mobile. 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.
Rogers and Shaw will oppose the application to prevent the Transaction to be made by the Commissioner of Competition, while continuing to engage constructively with the Competition Bureau in an effort to bring this matter to a resolution and ensure that the Transaction’s benefits can be realized by all Canadians.
As a result of this news, Rogers and Shaw have pushed the the outside date of the merger to July 31 2022. That way they can “engage” with the Competition Bureau and get them to change their minds. Something that I personally don’t see happening. So I expect this to be in court at some point.
Frankly, i’m not at all surprised by this as there has been healthy opposition to this merger as it is seen as reducing competition rather than increasing it. And frankly, Rogers specifically has larger issues at the moment. While they have made announcements about increasing the speeds of their Internet offering to better compete with Bell and Telus, the facts are that those announcements really won’t make the Internet experience for the majority of their customers any better anytime soon. So if I were Rogers, I’d focus on that rather than reducing competition by buying Shaw.