Proposed Rogers-Shaw merger concessions insufficient – competition agency

Industry:    

Canada’s competition agency said on Tuesday that concessions offered by Rogers Communications Inc to acquire Shaw Communications Inc in a $16 billion deal were insufficient.

The companies have proposed full divesture of Shaw’s wireless business, Freedom Mobile, to address concerns about the deal’s anti-competitive effects on the wireless market.

“The proposed divestitures will not eliminate the substantial lessening or prevention of competition resulting from the Proposed Transaction,” Commissioner of Competition Matthew Boswell said in a filing to the Competition Tribunal. The commissioner, head of the Competition Bureau, had already stated his opposition to the merger on competition grounds. read more His latest statement specifically addresses the question of the proposed disposal.

New owners of Freedom Mobile would be “likely to provide less effective financial, managerial, technical or other support for the Wireless Services business,” Boswell said in the filing, which was made public Tuesday.

The deal might substantially prevent or lessen competition in wireless and business services in British Columbia, Alberta and Ontario, according to the commissioner.

“Shaw remains resolute in our commitment to completing this transaction, which will deliver significant long-term benefits to Canadians, competition, connectivity, and the economy,” the company said in a statement to Reuters

It added that a “negotiated settlement that involves the divestiture of our wireless business is the best and most logical outcome.”

Rogers did not immediately responded to Reuters requests for comment.

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