By Paul Viera
OTTAWA-Canada’s antitrust watchdog says in court filings that selling some wireless assets would not be enough to address concerns over Rogers Communications Inc.’s proposed $16 billion buyout of Shaw Communications Inc.
In an application to Canada’s Competition Tribunal, which is responsible for deciding antiturst cases in the country, the antitrust regulator – known as the Competition Bureau – said the sale of the Freedom Mobile division of Shaw, with more than 2 million wireless customers, to another investor “will not mitigate the likely substantial prevention or lessening of competition and further impair the ability of the court to order an effective remedy.”
That poses a hurdle to Rogers and Shaw’s bid to salvage the $16 billion deal, involving two of Canada’s largest companies involved in cable TV, internet and wireless services. Rogers and Shaw, in a joint statement released Saturday, said they were working with federal authorities to address antitrust concerns – including the possible sale of Freedom Mobile.
The Competition Bureau said on Monday it would begin legal proceedings to block the transaction, which would see Rogers pay C$40.50, or the equivalent of approximately $31.00, per Shaw share for control of its competitor based in Calgary, Alberta. Shares of Shaw closed Tuesday on the Toronto Stock Exchange at C$35.41, up 1.5% from the previous day’s session.
About 20 pages of legal documents from the office, related to the possible sale of Freedom Mobile and why it would not satisfy the regulator’s concerns, have been redacted.
The redacted pages, however, suggest that Rogers had reached an agreement in late March to sell Freedom Mobile to another buyer. However, no further information on the possible agreement is available, due to blacked out pages, which may hide confidential business information.
Write to Paul Vieira at [email protected]