Rogers Communications Inc. and Shaw Communications Inc. they agreed not to close their $ 20 billion deal until antitrust issues are resolved and said they are working to negotiate a solution to the concerns of Canadian regulators.
The companies agreed on a temporary precautionary measure to complete the merger. This eliminates a possible scenario: that they would try to close the deal and then engage in a lengthy legal battle with the Competition Bureau of Canada, which is trying to block it.
Instead, Rogers and Shaw will have to negotiate an agreement with the office or defeat it at an expedited hearing in the Competition Court, a court-like body that hears antitrust cases. The side agreement with the competition control body “allows the parties to focus on addressing the commissioner’s concerns with the transaction to reach an agreement,” Rogers and Shaw said Monday in a press release.
Toronto-based Rogers has been trying to acquire Shaw for $ 40.50 per share in what would be one of the largest mergers in Canadian history. The company has tried to resolve antitrust complaints by selling Shaw’s Freedom Mobile division to a suitable buyer, but the office argued that this was an inappropriate solution to maintain competition.
“As part of an agreement to be filed in Court, Rogers has also agreed not to enforce any terms of its agreement with Shaw, or any other agreement entered into in connection with the proposed merger that limits Shaw’s ability to operate, maintain, improve or expand your wireless business, “the Competition Bureau said in a statement.
The antitrust agency filed the case to block the proposed acquisition in early May, saying it is concerned that consumers “are likely to pay higher prices” after the deal.
The regulator alleged that “eliminating Shaw as a competitor threatens to undo the significant progress it has made by introducing more competition into an already concentrated wireless service market,” where Rogers, Telus Corp. and ECB Inc. they serve about 87 per cent of Canadian subscribers.