Yahoo Finance Rogers and Shaw still waiting for key ISED approval days ahead of new merger closing date
The latest deadline to close Rogers Communications Inc.’s $26-billion takeover of Shaw Communications Inc. is fast approaching, but the federal government has yet to approve the transaction.
Last month, the companies extended the deadline to March 31, the fourth time the outside date for the deal has been pushed back. The Canadian telecom giants originally expected to close the transaction in the second quarter of 2022.
The telcos are still waiting for sign-off from Innovation, Science and Economic Development Canada (ISED), led by industry minister François-Philippe Champagne, on the transfer of spectrum licences from Shaw to Vidéotron.
On Feb. 13, Champagne said he hadn’t made a decision yet and that he is not bound by a fixed timeline.
The minister had initially signalled a willingness to approve the sale of Freedom to Quebecor/Vidéotron in October provided two conditions are met.
First, Vidéotron would have to hold Freedom’s spectrum licences for at least 10 years and, second, bring competitive wireless offerings to Ontario and Western Canada that mirror those in Quebec, where prices were brought down by around 20 per cent.
The merger already received approval from Shaw shareholders and the Court of King’s Bench of Alberta in 2021, the Canadian Radio-television and Telecommunications Commission in March last year and the Competition Tribunal at the end of 2022, a decision that was upheld by the Federal Court of Appeal last month.
The outside date for the deal comes a little over a week after the Canadian Radio-television and Telecommunications Commission on March 23 asked Rogers Communications Inc. to provide details of its network-sharing arrangements with Quebecor Inc. by April 11, following a complaint from the independent internet service provider TekSavvy questioning the deals.
“The CRTC’s timing is equally interesting ahead of the coming outside date of March 31. We’ve seen other regulatory files seemingly fast-tracked in recent weeks, like the TPIA announcement on March 8,” Adam Shine, an analyst for National Bank of Canada, wrote in a March 24 note to clients.
The evolving CRTC review may either further delay ISED’s decision-making process or be allowed to run its course separately as has otherwise been presumed, Shine said.
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He said the outside date could get pushed from March 31 to at least the end of April, or an approval may come from ISED, which has received all answers and written commitments from the companies that have been requested of them in recent weeks.
“It appears to us that this CRTC review is running parallel and separate,” he said.
The CRTC refused to comment on how the review will affect the decision from ISED. Rogers has also not indicated whether it will extend the deadline again, but has said previously that it respects the process and is committed to the Shaw deal.
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