Rogers challenges Competition Bureau efforts to block its takeover of Shaw
TORONTO – Rogers Communications Inc. says the Competition Bureau’s opposition to its proposed takeover of Shaw Communications Inc. is not supported by the evidence.
Friday’s filing by the telecoms giant follows the competition commissioner’s announcement in early May that the agency was seeking to block the $26 billion merger, over concerns that the deal would ‘prevent or lessen competition significantly. in wireless services”.
Rogers says the commissioner failed to properly assess the quantifiable effects of the merger, or properly weigh the efficiencies the transaction offers.
The company also says its offer to divest Shaw’s wireless division under the Freedom brand should largely address the commissioner’s competition concerns.
“To the extent that the transaction would generate any alleged competitive effects, these would be entirely eliminated by Freedom’s proposed divestiture,” Rogers wrote in its filing.
The commissioner, however, said in his May filing to block the deal that the proposed sale of Freedom would not be sufficient to deal with the reduced competition the merger would bring, arguing among other things that by selling Freedom, Shaw would be unable to bundle these services with its wireline business.
Rogers says the benefits of Shaw’s wireline business to Freedom are minimal and the wireless service provider operates as a stand-alone business.
The company says the commissioner’s efforts to block the transaction regardless of the divestments are unreasonable and contrary to both economics and the facts presented to the office.
In opposing the deal, the commissioner said that since entering the market in 2016 with the acquisition of Freedom, Shaw has driven down wireless prices and made wireless data more accessible, and that a sale of the wireless company would reduce these beneficial effects.
The commissioner also said the proposed deal with Rogers has already stifled competition from Shaw in the market, including a rollback of plans to expand into new markets, acquire more wireless spectrum and expand of its business wireless services.
Rogers says in its filing that the supposed competitive effects of Freedom’s move to commercial services are unsubstantiated, while the commission is wrong when it says Shaw would have made the necessary investments to be a competitive force in spectrum without 5G wire.
“Faced with the prospect of making these large capital investments, Shaw chose to sell instead.”
The company also says a ceded freedom would be just as well placed to compete because it would have the same spectrum, towers and other operating assets.
“A surrendered freedom would have the same or greater economic incentive to compete as it did when owned by Shaw.”
The Competition Bureau now has 14 days to respond to Rogers’ filing. Rogers and Shaw agreed this week not to complete the merger until the Competition Bureau’s objections are resolved.
This report from The Canadian Press was first published on June 3, 2022.
Companies in this story: (TSX: RCI.B, TSX: SJR.B)