Canada’s Rogers, Shaw, watchdog agree to start mediation over C$20 billion deal
By Divya Rajagopal
TORONTO (Reuters) – Rogers Communications Inc, Shaw Communications Inc and Canada’s competitors bureau have agreed to start out a mediation course of to beat the company’s antitrust points posed by Rogers’ C$20 billion ($15.5 billion) acquisition of Shaw, the competitors tribunal stated on Friday.
The transfer follows weeks of forwards and backwards between the events after the antitrust company blocked Rogers’ bid, saying the deal will cut back competitors in Canada’s concentrated telecoms business and push up wi-fi payments.
Whereas Rogers supplied a concession final week by agreeing to promote Shaw’s Freedom Cell to Quebecor Inc for C$2.85 billion, the competitors bureau stated the treatment measures should uphold competitors within the wake of the merger.
The mediation might pave the best way for a settlement, and keep away from a protracted authorized battle within the Competitors Tribunal, which decides the destiny of contested offers.
“It’s a signal to us that competitors commissioner will not be ideologically against the transaction so there’s a path in direction of conditional approval,” stated Aaron Glick, a director with New York-based Cowen LLC.
The Competitors Tribunal instructed Reuters in a press release that “the events have suggested the tribunal that they want to take part within the mediation set for July 4th and fifth,” including that every one info associated to any mediation could be confidential.
Rogers’ proposed acquisition of Shaw comes as excessive cell costs stay a hot-button situation in Canada, with prospects paying the best wi-fi payments on this planet. The highest three corporations – Rogers, BCE Inc and Telus Corp – account for nearly 90% of the business’s income.
With the events agreeing to the mediation course of, the destiny of the deal, which was launched in March 2021, might be a step nearer.
Reuters reported on Thursday the bureau was anticipated to hunt a divesture of Shaw’s mobile enterprise referred to as Shaw Cell to beat antitrust issues. In a submitting final week, the bureau stated that amongst different components Shaw Cell was a lead driver of development for Shaw and it might have expanded if not for the buyout by Rogers.
The events will argue their case earlier than a tribunal choose in the course of the mediation course of, who would supply attainable options to resolve the dispute. If the events conform to the options proposed by the choose then they might signal a consent settlement that will pave means for clearing the deal, a lawyer conversant in the method instructed Reuters.
In the event that they fail to agree, nonetheless, the matter will go to a trial which is anticipated to start out in November. An final result could be anticipated by year-end.
Shaw shares closed 1.5% increased at C$38.25 in Toronto on Friday. Rogers shares gained 1.4% to shut at C$62.43.
($1 = 1.2921 Canadian {dollars})
(Reporting by Divya Rajagopal in Toronto; Writing by Ismail Shakil; Modifying by Leslie Adler and Matthew Lewis)
