(OTTAWA) The Competition Bureau will face an “arduous task” in its effort to overturn the Competition Tribunal’s decision to dismiss its complaint against the takeover of Shaw Communications by Rogers Communications for 26 billion, estimated an analyst on Tuesday.
Even though the federal competition regulator won an emergency interim stay from the Federal Court of Appeals to suspend the decision, there are still several possible avenues for the agreement between the telecommunications groups to be concluded, Royal Bank analyst Drew McReynolds said in a note.
“While the timing of the closing of the agreement continues to be somewhat uncertain, we believe that each of the three companies remains committed to the transactions and that there is a strong likelihood that the transactions will close. »
Among other things, it is possible that the Federal Court refuses to hear the Bureau’s appeal, that the suspension of the agreement is dismissed before an appeal is heard or that an expedited appeal process allows for a decision to be rendered. by mid-2023.
Mr. McReynolds says that while he is confident the merger deal will be approved, potential avenues that could scuttle it include a Competition Bureau victory in the Federal Court of Appeals, or, in the case of defeat, the possibility that after long delays caused by leave to appeal, the case will go to the Supreme Court of Canada. It is also possible that the Department of Innovation, Science and Economic Development Canada will reject it.
The Competition Bureau said the Competition Tribunal erred in how it assessed the deal and the proposal that would see Quebecor subsidiary Videotron acquire Freedom Mobile, Shaw’s wireless carrier.
In asking for the decision to be appealed, the regulator argued that the court made fundamental errors of law.
In its decision last week, the Competition Tribunal said the merger was unlikely to result in higher prices for wireless customers and that it was satisfied that Freedom Mobile’s sales plan was sufficient to ensure that competition is not significantly reduced.
The Competition Bureau said the temporary stay of the court’s decision would hold until its request for a stay and injunction can be heard. No date has yet been set for this process.
In a joint statement on Friday, Rogers and Shaw noted their deep disappointment with the Competition Bureau’s efforts to block the deal, but added they remained committed to seeing it through.
The Competition Bureau argued that merging the two telecom companies would reduce competition, trigger price hikes and lead to deterioration of service.