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Rogers-Shaw transaction canceled by Ottawa


OTTAWA-

Industry Minister Francois-Philippe Champagne said he would not approve the proposed deal between Rogers Communications Inc. and Shaw Communications Inc., although he left the door open for a revised agreement.

The proposed $26 billion merger would have meant the wholesale transfer of wireless spectrum licenses from Shaw to Rogers, which requires Champagne’s approval.

“Today I officially declined that request,” he said on Tuesday evening. “My decision officially closes this chapter of the originally proposed transaction.”

Shaw’s ownership of Freedom Mobile was widely seen as the biggest obstacle to approval of the deal, and Montreal-based Videotron agreed earlier this year to buy it for $2.85 billion.

But Champagne says that before approving Videotron’s deal, he needs two specific concessions.

He says Videotron should agree to keep Freedom’s wireless licenses for at least 10 years.

“We don’t want anyone returning those licenses, we want them to be in it for the long haul,” he said.

Second, he said he would “expect to see” prices for wireless services in Ontario and Western Canada drop by about 20%, bringing them into line with Videotron’s current Quebec offerings.

Champagne did not say whether a successful sale of Freedom Mobile would mean the Rogers-Shaw deal could still be approved. He said his terms for Freedom’s license transfer were clear.

“There is a chapter that is closed – Shaw-Rogers, which is closed. There is a new chapter that is opening.

In addition to Champagne’s approval, the Rogers-Shaw deal required the green light from the Commissioner of Competition and the CRTC.

The Canadian Radio-television and Telecommunications Commission offered conditional approval for the broadcast portion of the deal in March.

Mediation is scheduled for later this week between the Commissioner of Competition and Rogers and Shaw. The Competition Bureau is trying to block the merger, saying the sale of Freedom Mobile doesn’t go far enough to allay its fears that telecom bills will rise amid reduced competition.

Champagne’s approval is required for any spectrum license transfer.


This report from The Canadian Press was first published on October 25, 2022.


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