Rogers and Shaw will not close their deal until antitrust problems are dealt with.
The companies agreed to a temporary injunction. There was a possibility that they would attempt to close the deal and then engage in a lengthy court battle with Canada's Competition Bureau.
Rogers and Shaw will either have to negotiate a settlement with the bureau or defeat it in an expedited hearing at the Competition Tribunal, a body similar to a court that hears antitrust cases. Rogers and Shaw said in a news release that the side deal with the competition watchdog allows the parties to focus on addressing the commissioner's concerns with the transaction in order to reach a settlement.
Rogers has been trying to acquire Shaw in a deal that would be one of the largest mergers in Canadian history. The company tried to solve antitrust complaints by selling Shaw's Freedom Mobile division to a suitable buyer, but the bureau argued that's an inadequate solution to maintain competition.
As part of an agreement that will be registered with the Tribunal, Rogers has agreed not to enforce any condition in its agreement with Shaw or any other agreement entered into in connection with the proposed merger that limits Shaw's ability to operate.
The antitrust agency filed a case to block the proposed acquisition because they are worried that consumers will pay higher prices after the deal.
Shaw's relocation as a competitor threatens to undermine the progress that has been made in introducing more competition into the wireless services market, where Rogers, Telus Corp and BCE Inc. serve about 85% of Canadian subscribers.
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