on July 6 that said meetings with Competition Commissioner Matthew Boswell on July 4 and 5, “did not result in a resolution of the commissioner’s objections to the proposed merger,” dashing any hopes of a short-term resolution to Ottawa’s concerns that the $26-billion acquisition would result in a less competitive market for wireless and cable services.
Some Bay Street analysts thought Rogers’ decision to sell Shaw’s Freedom Mobile assets to Quebecor Inc. would have assuaged the Competition Bureau’s concerns over losing a deep-pocketed rival to the Big Three telecommunications companies, an oligopoly that includes BCE Inc. and Telus Corp. The failure of an initial attempt at mediation raises questions about that assumption.Article content
Maher Yaghi, an analyst at Bank of Nova Scotia, called the news “slightly negative” for Rogers, Shaw, and Quebecor, as it suggests the parties are digging in for an ultimate confrontation in front of the Competition Tribunal. That could delay a final decision until the fourth quarter, or even the start of 2023, Yaghi said in a note to clients.
“Pushing the final decision into next year opens up Rogers to the possibility of having to refinance the debt that it raised earlier this year, causing some changes in the assumed interest cost to fund the deal,” Yaghi said.that they won’t close the deal until Boswell’s issues are resolved, either through mediation or at the Competition Tribunal.
“Rogers and Shaw are not precluded from continuing discussions with the commissioner at any time,” the statement said. “Rogers and Shaw intend to continue to work constructively with the commissioner to highlight the many benefits of the merger to all Canadians, including maintaining a strong and sustainable fourth wireless carrier across Canada through the proposed divesture of Freedom Wireless to Quebecor Inc.
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