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Ethernet cables are seen in front of Rogers and Shaw Communications logos. The companies have extended the deadline on their deal to March 31.DADO RUVIC/Reuters
Rogers Communications Inc., Shaw Communications Inc. SJR-B-T and Videotron Ltd. have extended the self-imposed deadline for their deal until March 31 as they await the federal Industry Minister’s approval.
The extension is the latest in a series of delays for Rogers’s planned $20-billion takeover of Shaw, which has been in the works for nearly two years. The deal, which was announced in March of 2021, would combine the country’s two largest cable networks and give Rogers the infrastructure it needs to quickly roll out 5G wireless services in Western Canada.
In order to win the blessing of regulators, Rogers RCI-B-T has struck a deal to sell Shaw’s Freedom Mobile wireless carrier to Quebecor Inc.’s Videotron for $2.85-billion. The divestiture would prevent the takeover from eliminating Canada’s fourth-largest wireless carrier and provide an opportunity for Montreal-based Videotron to expand its telecom business outside of its home province of Quebec.
Industry Minister François-Philippe Champagne, whose department is reviewing the transfer of Shaw’s wireless licences to Videotron, told the House of Commons industry and technology committee on Monday that he is not bound by the telecoms’ “artificial deadline” and would come to a decision once he is ready.
The companies said in a statement Friday morning that they “remain committed to the pro-competitive transactions” and are working with Innovation, Science and Economic Development Canada to obtain approval for the licence transfer.
The Globe and Mail previously reported that Mr. Champagne has asked the telecoms for firm commitments to maintain affordable wireless services after the transactions are completed, including written undertakings that impose consequences if the companies break their promises.
The minister is facing political pressure not to rush his approval. On Sunday, federal NDP Leader Jagmeet Singh sent Mr. Champagne a letter urging him to block the takeover over concerns that it could result in higher cellphone bills and job losses.
The deal has already overcome several regulatory hurdles. The telecoms scored a significant victory late last year when the Competition Tribunal dismissed the Competition Bureau’s application to block the takeover. (The tribunal is a quasi-judicial body that adjudicates cases brought by the bureau, an independent law enforcement agency.)
In a decision later upheld by the Federal Court of Appeal, the tribunal determined that the deal, with the sale of Freedom to Videotron, was pro-competitive and unlikely to result in materially higher wireless prices.
The Canadian Radio-television and Telecommunications Commission has also given the takeover its blessing by approving the transfer of Shaw’s broadcasting assets to Rogers.
However, the CRTC is still mulling whether a series of agreements between Rogers and Videotron, which underpin the Montreal-based telecom’s ability to offer wireless and internet bundles in Western Canada, are so favourable toward Videotron that they give the telecom an unfair advantage over its competitors.
Last month, several Conservative members of Parliament published an open letter urging Mr. Champagne to await the outcome of that investigation before signing off on the licence transfer and permitting the deal to go forward.
