Yahoo Finance Deadline for Rogers, Shaw merger extended again
The deadline for closing the proposed merger of Rogers Communications Inc. and Shaw Communications Inc., as well as the sale of Shaw’s Freedom Mobile to Quebecor Inc., has been extended to Feb. 17 as the telcos await a decision from Innovation, Science and Economic Development Canada (ISED) on the deal.
Rogers and Shaw previously extended the outside date for the merger’s closing to Jan. 31 from Dec. 31, which automatically extended Quebecor subsidiary Vidéotron Ltd.’s acquisition of Freedom Mobile to the same date. The Canadian telecom giants had originally expected to close the transaction in the second quarter of 2022.
The fate of their proposed $26-billion merger remains uncertain until ISED, led by federal industry minister François-Philippe Champagne, approves the transfer of spectrum licences from Freedom Mobile to Vidéotron.
In a joint statement issued Jan. 30, the three telcos said they were continuing to work with ISED to get the approval needed to close the deal. As part of the divestiture, Vidéotron would purchase Freedom Mobile for $2.85 billion — a transaction Rogers and Shaw have argued would allay concerns about reduced competition stemming from their merger.
Jan. 25 marked three months since Champagne had outlined two conditions for the transfer of Freedom’s spectrum licences, National Bank of Canada analyst Adam Shine observed in a note to clients Jan. 29.
“We were surprised that Minister Champagne didn’t render his decision last week,” Shine wrote.
The minister said last week that he will render a decision on the transfer “in due course” but has not indicated when this is expected. The Toronto Star reported on Jan. 26 that the minister said he is in no hurry to give the deal the green light.
“As the regulator, I am not bound by any deadline,” he told the Star.
Champagne had signalled a willingness to approve the sale of Freedom to Vidéotron when he identified two conditions he would find acceptable for the transfer of wireless spectrum.
Vidéotron, he said in October, would have to hold Freedom’s spectrum licences for at least 10 years, and bring competitive wireless offerings to Ontario and Western Canada that mirror Quebec, where prices were brought down by around 20 per cent.
Desjardins Group analyst Jérome Dubreuil said the uncertain timing on the merger’s closing makes it more challenging for investors to position ahead of the quarter. Rogers is set to report its 2022 fourth quarter earnings on Feb. 2.
The deal cleared a major hurdle last week after the Federal Court of Appeal dismissed a Competition Bureau request to overturn approval of the agreement by the Competition Tribunal.
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