Rogers (RCI.B) seeks to scrap regulator's objection to merger with Shaw

Be the First to Comment Read

Rogers (RCI.B) seeks to scrap regulator's objection to merger with Shaw

Follow us on Google News:
 Rogers (RCI.B) seeks to scrap regulator's objection to merger with Shaw
Image source: © Suprunovichvalentin | Megapixl.com

Highlight

  • Rogers responded to the bureau's objection in a 19-page petition to a tribunal.
  • It asked the tribunal to scrap Canada competition bureau's rejection to its purchase of Shaw.
  • Rogers said the bureau had failed to quantify the reasons the proposed merger.

Rogers Communications Inc (TSX: RCI.B) on Friday asked a tribunal to scrap Canada competition bureau's rejection to its C$20 billion ($15.9 billion) purchase of Shaw Communications Inc, arguing the merger would create more competition rather than stifle it.

Calling the opposition to the deal "unreasonable", Rogers said the bureau had failed to quantify the reasons the proposed merger with Shaw would lessen competition. It added that any alleged competitive effects were outweighed by the "significant efficiencies the transaction will generate."

Also read: Rogers-Shaw deal in hot water, but are RCI and SJR stocks still a buy?

Rogers, in a 19-page petition to the tribunal, responded to the bureau's refusal to accept the divesture of Freedom mobile as part of the merger remedy. Rogers asked the tribunal to dismiss the bureau's application to block the deal.

In Canada, the top three companies - Rogers, BCE Inc (TSX: BCE) and Telus Corp - account for almost 90% of the telecom industry revenue and consumers paid the highest mobile bills in the world in 2021, according to a report by Rewheel, a Finnish telecom research firm.

The high wireless rates are a hot-button issue and the government has vowed to bring it down.

Also read: Greenlane (TSX: GRN) is skyrocketing: A dirt-cheap clean stock to buy?

The competition bureau blocked the deal and said it was not convinced Rogers' proposal to sell Freedom mobile would keep competition alive in the sector. Freedom is a low-cost wireless service provider with about 1.7 million subscribers.

What is Competition Bureau’s case against the Rogers-Shaw acquisition deal?

What is Competition Bureau’s case against the Rogers-Shaw acquisition deal?

Rogers rebutted the bureau's claims and said Freedom mobile on its own would remain competitive even after its split from Shaw as it is run as an independent business. It said a "divested Freedom will have the same economic incentive to compete as it had when owned by Shaw."

The bureau argued the new buyer of Freedom would be unable to expand and deploy 5G network to bring down the wireless prices.

Rogers disputed the bureau's claims that Shaw was a direct competitor to the company, saying its main competitors were Bell and Telus.

This week, Rogers agreed to put the deal on hold.

($1 = 1.2588 Canadian dollars)

Disclaimer

The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK