Market reaction positive to appeal outcome over Rogers-Shaw merger

Commissioner of Competition Matthew Boswell said Tuesday his agency will not take the fight against the takeover of Shaw Communications Inc. by Rogers Communications Inc. to the Supreme Court. The announcement came hours after the Federal Court of Appeal (FCA) dismissed the Competition Bureau’s (CB) appeal of a Competition Tribunal ruling allowing the merger to proceed. “We are truly disappointed that the Federal Court of Appeal has dismissed our appeal of the Competition Tribunal’s decision in Rogers-Shaw,” Boswell said in a statement. Although the bureau disagrees with the ruling, it will not proceed with any further appeals, the news release noted. Market reaction was positive. Several financial analysts released notes praising the court decision. “The outright dismissal of the Bureau’s position by the Competition Tribunal and now the Federal Court of Appeal in our opinion point to the strong legal position of Rogers with respect to its proposed acquisition of Shaw and divestiture of Freedom Mobile to Quebecor,” Drew McReynolds of RBC Dominion Securities Inc. wrote. At the National Bank of Canada, Adam Shine said the issue has run its course. Aravinda Galappatthige of Canaccord Genuity looks forward to the final outcome of the merger. “The next and final step is to obtain approval from the Minister of ISED, at which point the regulatory requirements would be complete paving the way for a closing of the deal,” the analyst wrote. “Based on public comments made by the minister, we expect ISED approval to come through without much delay.” The two telecoms, along with Quebecor Inc., which is purchasing Freedom Mobile from Shaw, issued a joint statement Tuesday evening. “We welcome this clear, unequivocal and unanimous decision by the Federal Court of Appeal,” the trio said. “We continue to work with Innovation, Science and Economic Development Canada to secure the final approval needed to close the pro-competitive transactions and create a stronger fourth wireless carrier in Canada and a more formidable wireline competitor.” Minutes after the decision was rendered, OpenMedia put out a release condemning the verdict. “We’re seeing a collapse of independent ISPs that create positive price pressure on telecom giants, and we’re on the verge of adding Shaw to that list,” campaigns director Matt Hatfield was quoted as saying. “In 2022 alone, we lost over a half dozen independent providers to Big Telecom buyouts.” –Reporting by Paul Park at ppark@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Market reaction positive to appeal outcome over Rogers-Shaw merger

News | 01/25/2023 6:23 pm EST

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