One of the final hurdles to the union of two of the nation's largest telecommunications firms has been cleared.
The Competition Tribunal said that the federal antitrust commissioner failed to prove that the deal would cause harm to competition. The court found that the merger of Rogers and Shaw won't lead to higher prices or a decline in service.
A seven-month legal process has delayed the closing of the C$20 billion transaction far past its originally planned date. The story is not over. Even if Boswell doesn't appeal the ruling, the transaction still requires the approval of Trudeau's government.
The application to block the merger was dismissed by the tribunal. Boswell said that they are considering their next steps. Rogers was still working on a statement, according to a spokesman.
Rogers, Canada's largest wireless company with more than 10 million phone customers, agreed to buy Shaw in March 2021. Rogers would have some C$20 billion in annual revenue, the kind of scale it says it needs to compete with BCE and Telus.
Rogers wanted to expand its lead in wireless through the acquisition of Shaw's Freedom Mobile division. Rogers wasn't allowed to take control of Shaw's wireless licenses.
Boswell's agency sued the companies in May to stop the deal because it would hurt consumers. Rogers and Shaw agreed to sell Freedom Mobile to Quebecor in exchange for Videotron.
If the larger Rogers-Shaw transaction closes, the latter transaction will happen. It was crucial to the victory.
Videotron is a market disrupter that has done well in Quebec. The tribunal said Thursday that it has drawn upon that experience to develop very detailed and fully costed plans for its entry into and expansion within the relevant markets.
Shaw does most of its business in the two Canadian provinces where it does most of its business. Videotron is the fourth major wireless provider in the region.
Industry Minister Francois-Philippe Champagne appeared to signal the government's support for the deals by publicly setting out the conditions under which he'd sign off on Quebecor's purchase of Freedom The conditions have been agreed to by Quebecor.
Rogers is offering C$40.50 in cash for each share of Shaw, which closed at C$35.77.
The full decision of the panel that heard the case is expected to be released within 48 hours.
Keldon Bester is a fellow at the Center for International Governance innovation and a former special adviser to Canada's Competition Bureau. Boswell may appeal it, he said.
Stephen wicary assisted.
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