The Rogers acquisition of Shaw Communications has hit yet another roadblock. Yesterday, the Federal Court of Appeal granted the Competition Bureau an “emergency interim stay (suspension) of the Tribunal’s decision, which “will remain in effect until [the Competition Bureau’s] application for a stay and an injunction can be heard”, the bureau tweeted.
This came after the Competition Tribunal cleared the path for the Rogers C$26 billion (including assumed debt) proposed acquisition of Shaw Communications on Dec. 29, dismissing the Competition Bureau’s application to block the merger. The proposed sale of Shaw’s wireless service subsidiary Freedom Mobile to Quebecor’s Videotron was also confirmed as a precondition to the deal.
While Rogers and Shaw proceeded to thank the Tribunal members for the favorable decision in a joint statement, the Bureau’s commissioner Matthew Boswell expressed being “very disappointed” in a statement.
The finish line, however, was moved again for the telcos, as they became advised the next day of the Bureau’s application for an injunction (which blocks the deal from closing while the appeal is pending) and appeal of the Tribunal’s decision.
“The Tribunal’s decision was the right one, and the Tribunal was clear in its summary that the transactions we have proposed are not likely to substantially lessen competition in Alberta and British Columbia. Instead, as the Tribunal found, the transactions will likely result in an intensifying of competition. We are deeply disappointed that the Commissioner continues to attempt to deny Canada and Canadians the advantages that will come from these proposed transactions,” Rogers and Shaw responded in a joint statement.
The news of the appeal does not bode well for Rogers, as the company was hoping the deal would go through before the end of last year to avoid facing hundreds of millions in fees to its lenders and a potential lawsuit from Shaw (the target date is now Jan. 31). However, an appeal could take months.
Minister of Innovation, Science and Industry, François-Philippe Champagne said he will allow the legal dispute to be resolved before making a final decision on the deal.