(Ottawa) The competition bureau will face a “herculean task” in its efforts to overturn a competition tribunal’s decision to dismiss its complaint against Rogers Communications’ $26 billion acquisition of Shaw Communications, an analyst estimated Tuesday.
Although the federal competition regulator has won an emergency stay from the Federal Court of Appeal to put the decision on hold, there are still many possible avenues for agreement between telecom groups to be worked out, Royal Bank analyst Drew McReynolds said in a note.
“While the timing of closing the agreement remains somewhat uncertain, we believe that each of the three companies remains committed to the transaction and that there is a strong possibility that the transaction will close.”
Among other things, it is possible that the federal court will refuse to hear the office’s appeal, refuse to put the agreement on hold before the appeal is heard or have the expedited appeals process allow for a decision by mid-2023.
Mr McReynolds says that while he is confident the merger deal will be approved, potential avenues that could derail it include a competition bureau winning in the Federal Court of Appeal, or, in the event of a defeat, the possibility of lengthy delays due to permission to appeal, the case going to the Supreme Court of Canada. . It is also possible that Innovation, Science and Economic Development Canada will reject it.
The competition bureau said the competition court erred in how it assessed the deal and the proposal that would see Quebecor subsidiary Videotron acquire Freedom Mobile, Shaw’s wireless carrier.
In an appeal against the decision, the regulator argued that the court made fundamental legal errors.
In its decision last week, the competition tribunal said the merger was unlikely to result in higher prices for wireless customers, and that it was satisfied that Freedom Mobile’s sales plan was sufficient to ensure that competition did not drop significantly.
The Competition Bureau said the temporary stay of the court’s decision would continue until her request for stay and injunction is heard. No date has been set for this process.
In a joint statement on Friday, Rogers and Shaw indicated their extreme disappointment with the Competition Bureau’s efforts to block the deal, but added that they remain committed to making it happen.
The Competition Bureau argued that merging the two telecom companies would reduce competition, drive up prices and degrade service.
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