Rogers and Shaw enter mediation with Competition Bureau over $26 billion merger

Rogers and Shaw have started the mediation process with Canada’s Competition Bureau to try and move the dial in the merger between two of Canada’s largest network operators.

Rogers first announced that it intended to purchase Shaw for C$26 billion in March 2021. The deal, which was initially expected to close in the first half of 2022, has faced numerous delays as Canada’s regulators scrutinized its effects on competition.

In order to get the nod from regulators, Rogers and Shaw had to find an appropriate buyer for Freedom Mobile, Shaw’s subsidiary carrier brand. They ultimately took a C$2.85 billion offer from Quebecor, which owns Videotron in Quebec.

“Videotron (Quebecor) wasn’t Rogers/Shaw first choice as indicated in the Competition Tribunal documents. That was most likely Xplornet,” wrote telecom consultant Mark Goldberg in an email statement to IT World Canada.

Although Freedom Mobile has found a buyer that may satisfy Canada’s Competition Bureau, Reuters reported that Shaw may now also be required to find a new home for its Shaw Mobile, an affordable mobile service exclusive to Alberta and B.C. launched in July 2020. The service uses Shaw’s LTE network in conjunction with Wi-Fi to transfer data.

Globalive, a Canadian private equity firm founded by Anthony Lacavera, had previously offered to buy Freedom Mobile for C$3.75 billion. Lacavera was the founder of Wind Mobile, which was sold to Shaw and rebranded to Freedom Mobile in 2016.

Lacavera has previously called for regulators to block the sale of Freedom Mobile to Quebecor, reported the Globe and Mail. Globalive has reiterated its commitment to invest in Freedom’s networks if it’s chosen as the buyer. But Goldberg said that the regulators may have questioned the company’s history.

“Globalive has no real track record of successfully competing. It lost money and sold Wind,” wrote Goldberg. “I suspect the government authorities would view its business plan as aiming for an exit (like most VCs), rather than building a sustainable company.”

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Tom Li
Tom Li
Telecommunication and consumer hardware are Tom's main beats at IT World Canada. He loves to talk about Canada's network infrastructure, semiconductor products, and of course, anything hot and new in the consumer technology space. You'll also occasionally see his name appended to articles on cloud, security, and SaaS-related news. If you're ever up for a lengthy discussion about the nuances of each of the above sectors or have an upcoming product that people will love, feel free to drop him a line at [email protected].

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