Rogers Communications Agrees To Put Shaw Merger On Hold In Lieu Of Commissioner of Competition Injunction
The controversial merger between Rogers Communications (TSX: RCI.B) and Shaw Communications Inc. has seemingly found a workaround regarding the interim injunction filed by the Commissioner of Competition. The Canadian communications firms have agreed to put the transaction on hold until the commission’s issues have been resolved.
The two companies agreed not to close yet the $26-billion pending transaction, which was originally slated to close by first half of 2022 and has been extended to July 31, 2022. The standstill remains until “either a negotiated settlement is agreed with the Commissioner or the Competition Tribunal has ruled on the matter.”
“As a result, there is no need for the Tribunal to hear the Commissioner’s application for an interim injunction,” the company said in its statement.
The agency is seeking the injunction after it has manifested its intent to oppose the merger. According to Rogers, the objection arises from concerns “regarding the possible impact of the transaction on Canada’s competitive wireless market.”
To address the concerns, the firms are working on fully divesting Rogers’s wireless business, Freedom Mobile, which is a direct competitor of Shaw.
Aside from this current hurdle, the transaction also has a pending approval from the Ministry of Innovation, Science and Economic Development, which also brought the same competition concerns.
However, the transaction has already received approvals from Shaw shareholders, the Court of Queen’s Bench of Alberta, and the Canadian Radio-television and Telecommunications Commission.
Rogers Communications Class B Shares last traded at $64.95 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.