Canada’s competition watchdog says it still intends to block Rogers Communications Inc.’s $26-billion proposed takeover of Shaw Communications Inc. in the first day of a weeks-long hearing before the Competition Tribunal.
In its opening argument Monday, the Competition Bureau reiterated its position that the planned sale of Shaw-owned wireless carrier Freedom Mobile to Quebecor Inc.’s Videotron Ltd. is not enough to eliminate its concerns that the broader merger would lead to worse services and higher prices for consumers.
The regulator says separating Freedom from Shaw would make it a diminished competitor because it would remove Freedom’s access to certain shared human resources and synergies the company “has enjoyed” as part of Shaw.
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It says the divestiture would not replace the “vigorous” competitive presence offered by Shaw.
The Competition Bureau says the sale would create a situation where Videotron is likely to be more “aligned” with Rogers and more vulnerable to anti-competitive actions by Rogers.
It also notes that even with the sale of Freedom, Rogers will still be acquiring customers from Shaw Mobile.
The sale of Freedom Mobile to Videotron would see Quebecor buy all of Freedom’s branded wireless and internet customers as well as all of Freedom’s infrastructure, spectrum and retail locations in a move that would expand Quebecor’s wireless operations nationally.
The Competition Bureau is one of three regulatory agencies that must approve the deal before it can close, in addition to the CRTC and Innovation, Science and Economic Development Canada.
The hearing is expected to last four weeks with oral arguments scheduled for mid-December.
Rogers is hoping to close the Shaw deal by the end of the year, with a possible further extension to Jan. 31, 2023.
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