Canada's antitrust regulator plans to block Rogers $16B takeover of Shaw

May 07, 2022 4:02 PM ETShaw Communications Inc. (SJR), RCIBy: Joshua Fineman, SA News Editor13 Comments

Low angle view of modern office building with glass facade and comapny logo of Rogers Communications Inc. on top on sunny day in autumn with clouds in the sky.

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Canada's antitrust regulator informed Rogers Communications (NYSE:RCI) and Shaw Communications (NYSE:SJR) of its intention to oppose the $16 billion transaction.

Rogers (RCI) and Shaw said they remain committed to the deal, according to a joint statement Saturday. Rogers and Shaw plan to oppose the application to prevent the deal made by the Commissioner of Competition, while continuing to "engage constructively" with the Competition Bureau.

The companies have been trying to remedy the regulator's concerns through proposing the full sale of Shaw’s wireless business, Freedom Mobile. Globalive Capital offered C$3.75 billion to buy Freedom Mobile from Shaw (SJR), the Globe and Mail reported in March.

The Canadian antitrust opposition comes after The Canadian Radio-television and Telecommunications Commission agreed to allow the combination in March.

Shaw and Rogers agreed to extend the outside date for the transaction until July 31 and the companies will will continue to seek approval of the Transaction from the Ministry of Innovation, Science and Economic Development.

Approval from Canada's federal innovation department may also prove a difficult task as Innovation, Science and Industry Minister François-Philippe Champagne indicated in comments in March.

"The wholesale transfer of Shaw’s wireless licenses to Rogers is fundamentally incompatible with our government’s policies for spectrum and mobile service competition, and I will simply not permit it," Champagne said at the time.

Rogers (RCI) announced its agreement to acquire Shaw (SJR) in March of last year.

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