Court rejects Competition Bureau's bid to appeal Rogers-Shaw merger approval (2023)

The merger now only requires approval from Innovation, Science and Economic Development Canada

Author of the article:

Denise Paglinawan

Published Jan 24, 20233 minute read

Join the conversation

Court rejects Competition Bureau's bid to appeal Rogers-Shaw merger approval (1)

Article content

The Federal Court of Appeal has decisively rejected the Commissioner of Competition’s bid to overturn a tribunal decision approving the $26-billion merger between telecom giants Rogers Communications Inc. and Shaw Communications Inc., paving the way for one of the biggest corporate combinations in Canadian history.

Story continues below

This advertisement has not loaded yet, but your article continues below.

Article content

We apologize, but this video has failed to load.

Try refreshing your browser, or
tap here to see other videos from our team.

Court rejects Competition Bureau's bid to appeal Rogers-Shaw merger approval Back to video

We apologize, but this video has failed to load.

Try refreshing your browser, or
tap here to see other videos from our team.

“It will be pointless to send this case back to the Competition Tribunal for re-decision,” Justice David Stratas told the court in dismissing the appeal during a one-day hearing in Ottawa Jan. 24.

Court rejects Competition Bureau's bid to appeal Rogers-Shaw merger approval (2)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

In its appeal application, the Competition Bureau had alleged the tribunal “made four legal errors,” and that a different outcome would have been reached if those “legal errors” had not been made. The Court of Appeal, however, did not agree.

“Even if the Competition Tribunal erred on the narrow legal points the Commissioner now raises in this court, we are not persuaded that the result could have been different,” Stratas said.

The merger now only requires approval from Innovation, Science and Economic Development Canada (ISED), led by Industry Minister François-Philippe Champagne. A House of Commons committee, which plans to make recommendations to the minister, is set to hold meetings on Jan. 25 to review the updated deal, including the proposed remedy to sell Freedom Mobile to Vidéotron.

Advertisement 3

Story continues below

This advertisement has not loaded yet, but your article continues below.

Earlier Tuesday, the judges had asked questions about the Competition Bureau’s legal arguments, reminding the parties that the court could only interfere if the tribunal had committed “palpable and overriding errors” in its decision, which one judge said was “a very high test.”

“We disagree with Commissioner,” Stratas said later in the day, adding that the burden of proof would only matter if there is a gap on the key evidence or where overall the case is so close that a makeweight or tiebreaker is needed. “Close, this case, was not,” he said.

The Commissioner’s appeal came after the Competition Bureau had failed to resolve its objection to the deal with the companies in mid-2022 and then had its attempt to block the deal dismissed by the Competition Tribunal on Dec. 29.

Advertisement 4

Story continues below

This advertisement has not loaded yet, but your article continues below.

In that decision, the three-member tribunal rejected the Bureau’s arguments that combining the two telecom giants would substantially lessen wireless competition, particularly in light of a side deal to sell Shaw’s Freedom Mobile to Quebecor Inc.subsidiaryVidéotron for $2.85 billion.

Rogers and Shaw have argued throughout the tribunal proceedings that the divestiture of Freedom Mobile ought to allay concerns about reduced competition stemming from the merger. The telcos argued that Vidéotron, a major player in Quebec but with little presence elsewhere, would make for a “stronger” fourth competitor in Canada’s wireless market, in place of Shaw.

Sending the case back to the tribunal for re-adjudication could have had significant consequences for the deal, the court said Tuesday.

Advertisement 5

Story continues below

This advertisement has not loaded yet, but your article continues below.

“In some cases, this delay, potentially substantial, could cause a transaction that, in fact, is pro-competitive and in the public interest, to die,” Stratas said.

The finding mirrored arguments laid out by lawyers for Rogers in their request to dismiss the Bureau’s appeal in a court filing last week.

“Respectfully, this pro-competitive transaction has been delayed long enough and must be allowed to proceed,” Rogers’ legal counsel wrote.

Recommended from Editorial

  1. Lawyers for Shaw, Rogers argue appeal of ‘pro-competitive’ merger should be rejected in court filings
  2. What you need to know about the state of the Rogers-Shaw merger
  3. TekSavvy asks CRTC to review legality of Rogers-Vidéotron deal

Rogers and Shaw have extended the outside date for the merger’s closing to Jan. 31 from Dec. 31. The telecom giants had originally expected to close the transaction in the second quarter of 2022.

Story continues below

This advertisement has not loaded yet, but your article continues below.

Article content

Lawyers for Rogers stressed during the tribunal hearings that if a decision wasn’t reached before Dec. 31, the company would have to pay out an additional $250 million to bondholders.

In a note to clients, analystsfor National Bank of Canada said following the Federal Court of Appeal’s rejection, the Competition Bureau can, in theory, appeal to the Supreme Court within 60 days — but it is unlikely that the Supreme Court would agree to hear the case.

“We can’t imagine how senior members of the Justice Department would allow such an appeal to be attempted to the top court,” analyst Adam Shine wrote.

Rogers’ stock closed up nearly three per cent at $66.49 in Toronto while Shaw shares closed up a similar amount at $39.50.

• Email: dpaglinawan@postmedia.com | Twitter: denisepglnwn

  1. Alphabet's DeepMind lays off staff, closes Edmonton office
  2. Subscriber only. Exclusive: Canadian housing market 'is a castle built on sand': David Rosenberg

    Subscriber only

  3. Diane Francis: Justin Trudeau Liberals keep proving they are amateurs
  4. Eric Nuttall: Canada could be as green and wealthy as Qatar and Saudi Arabia if government wakes up
  5. Posthaste: What another Bank of Canada hike could mean to the housing market and borrowers

Related Stories

  1. Lawyers for Shaw, Rogers argue appeal of 'pro-competitive' merger should be rejected in court filings 'This pro-competitive transaction has been delayed long enough and must be allowed to proceed'

    1week ago Telecom

  2. TekSavvy asks CRTC to review legality of Rogers-Vidéotron deal Side deal is key to Rogers' proposed $26-billion merger transaction with Shaw

    5days, 4hours ago Telecom

  3. Story continues below

    This advertisement has not loaded yet, but your article continues below.

  4. TekSavvy asks CRTC to review Rogers deal to sell Freedom to Videotron CHATHAM, Ont. — Major telecom companies in Canada are allegedly giving preferential access to their networks in violation of the rules, TekSavvy Solutions Inc. said Thursday as it asked the federal telecommunications regulator to investigate.

    5days, 4hours ago PMN Business

  5. What you need to know about the state of the Rogers-Shaw merger Proposed $26-billion merger will be one of the biggest corporate combinations in Canadian history if it wins approval

    1week ago Telecom

  6. Federal court dismisses Competition Bureau's appeal to block Rogers-Shaw merger The Competition Bureau failed to convince the Federal Court of Appeal that the Competition Tribunal’s decision in favor of the Rogers-Shaw merger was legally erroneous or would lead to lessened competition.

    4hours, 22minutes ago Information Technology

This Week in Flyers

Top Articles
Latest Posts
Article information

Author: Rev. Porsche Oberbrunner

Last Updated: 02/04/2023

Views: 5996

Rating: 4.2 / 5 (53 voted)

Reviews: 84% of readers found this page helpful

Author information

Name: Rev. Porsche Oberbrunner

Birthday: 1994-06-25

Address: Suite 153 582 Lubowitz Walks, Port Alfredoborough, IN 72879-2838

Phone: +128413562823324

Job: IT Strategist

Hobby: Video gaming, Basketball, Web surfing, Book restoration, Jogging, Shooting, Fishing

Introduction: My name is Rev. Porsche Oberbrunner, I am a zany, graceful, talented, witty, determined, shiny, enchanting person who loves writing and wants to share my knowledge and understanding with you.