Rogers Court Ruling Starts Clock Ticking to Jan. 31 Deadline
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(Bloomberg) — Canada’s merger court released its full decision allowing Rogers Communications Inc.’s takeover of a rival, starting the clock on a critical four-week period to close the deal.
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Rogers’ acquisition of Shaw Communications Inc., and a related deal that will see Quebecor Inc. take ownership of most of Shaw’s wireless assets, “are not likely to result in materially higher prices” for consumers in the provinces of Alberta and British Columbia, the country’s Competition Tribunal said in an 88-page decision dated Dec. 31 and posted over the holiday weekend.
It dismissed an application by Canada’s antitrust czar, Matthew Boswell, to block the C$20 billion ($14.7 billion) transaction, which is one of the largest corporate mergers in Canada’s history.
The tribunal’s decision was already known because it issued a summary of its findings on Dec. 29, sending Shaw and Rogers shares higher Friday. But the release of the full text is a key step that allows Boswell to begin an appeal — which he has already said he will do.
The deadline for closing the deals is Jan. 31, and it can’t be extended past that date without Quebecor’s permission. Rogers and Shaw announced their combination almost two years ago, on March 15, 2021. Shaw shares closed Friday at C$39.01 in Toronto, C$1.49 below the Rogers offer.
‘Proven Record’
Quebecor “has a proven record of aggressive pricing and innovation in Quebec and parts of Eastern Ontario. Its expansion into Alberta, British Columbia and the rest of Ontario will be facilitated by the very favorable arrangements that it has negotiated” as part of the deal to buy Shaw’s wireless business, the court said in its reasons.
Boswell’s only chance of stopping Rogers from buying Shaw is to persuade the Federal Court of Appeal to agree to hear his arguments. The court agreed to an interim suspension of tribunal’s decision until an application can be heard, the Competition Bureau said on Twitter.
One potential basis for an appeal is the fact the Competition Tribunal chose to look at the two deals together. The proposed sale of Shaw’s wireless assets to Quebecor wasn’t arranged until after Boswell filed suit against Rogers and Shaw.
Lawyers for Boswell took the stance that, legally, the tribunal should have looked at the Rogers-Shaw transaction in its original form, before the Quebecor deal. But the tribunal dismissed that idea as “divorced from reality.”
University of Ottawa professor Jennifer Quaid, an expert in competition law, said on Twitter that she was surprised by how “short and legally thin” the tribunal’s reasons were.
“Do we want to create a precedent now where, essentially, parties can, after the original filing has gone, come in with a new deal — and the tribunal just takes on faith that, well, since it comes from the parties, it must be a good deal?” Quaid said in a phone interview.
–With assistance from Brian Platt.
(Updates with information on temporary stay of tribunal ruling in seventh paragraph)
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