Rogers' bid for Shaw gains support after court rejects antitrust action to block deal

Rogers’ bid for Shaw gains support after court rejects antitrust action to block deal

TORONTO, January 24 (Reuters). A Canadian court on Tuesday rejected an attempt by the antitrust bureau to block an offer from Rogers Communications Inc (RCIb.TO) to buy Shaw Communications Inc (SJRb.TO) for C$20 billion ($14.9 billion) in support of the companies’ efforts to close the deal. almost two years ago.

“It would be pointless to take this case back to the competition tribunal for a second ruling,” Judge David Stratas told the court, calling many of the legal issues raised by the antitrust agency “unfounded.”

The Ottawa federal appeals case was the latest attempt by the antitrust bureau to thwart the deal, saying the deal would hurt competition in Canada’s telecommunications industry, where consumers pay some of the highest mobile phone bills in the world.

Shares of Rogers and Shaw jumped after the decision and both traded up about 3% at the end of the day, while the benchmark Canadian Equity Index (.GSPTSE) was lower.

Announced almost two years ago, the deal was a test of the Antitrust Bureau’s ability to expand consumer choice in Canada, where a handful of companies control a large amount of business.

Rogers offered to sell the Shaw Freedom Mobile division to Quebecor (QBRb.TO) Videotron for CA$2.85 billion to resolve antitrust concerns, but the competition bureau argued that the combined Rogers-Shaw would have no viable competitor in Quebecore.

Shaw and Rogers intend to complete the deal by January 31, although this deadline may be extended in agreement with Quebecor.

Industry Minister François-Philippe Champagne, who has the final say on the deal, said in a statement later Tuesday that he would review the court’s decision on the deal and that competition and affordability in the telecommunications sector remained a top priority.

Analysts at the National Bank of Canada said in a note last week that the bureau could also appeal to the Supreme Court and would have 60 days to do so.

But they noted that any such move must first be reviewed by a committee of senior members of the Justice Department, who usually try to avoid sending cases they may consider of little merit to the highest court.

The judges spent the morning questioning the competition bureau’s attorney in their anti-deal case and delivered their verdict in the afternoon without hearing from Rogers and Shaw.

The bureau had previously failed to convince the Competition Tribunal, a quasi-tribunal that hears merger disputes, that the deal hurt Canadian consumers. It was approved on December 30th.

“In the opinion of the tribunal, this was not a particularly closed case,” the judge told the court on Tuesday. “I would say that based on the evidence, it was fairly conclusively established that there was no significant reduction in competition.

“They also found a number of pro-competitive considerations.”

The Canadian Competition Bureau, Rogers Communications and Shaw Communications did not immediately respond to a Reuters request for comment.

Reporting by Maya Kaidan in Toronto, additional reporting by Mehta Chavi and Ismail Shakil; Edited by Denny Thomas, Mark Porter and Deepa Babington.

Our Standards: Thomson Reuters Trust Principles.

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