Court dismisses appeal of ruling in Rogers-Shaw merger

Approval from the Innovation Minister is all the remains for the deal to close.

A federal court has dismissed an appeal brought to it by the Competition Bureau, clearing one of the last major hurdles for the Rogers-Shaw merger to close by the end of the month.

The Bureau had sought to reverse a ruling made by the Competition Tribunal, which decided that the $26 billion deal – along with accompanying sale of Freedom Mobile to Videotron – was not likely to result in higher wireless prices for Canadians or anti-competitive behaviour.

Lawyers for the Competition Bureau argued that the Tribunal made legal errors in its judgement. Among the errors claimed was focusing its investigation primarily on the Freedom sale, which was proposed as a remedy only after the Competition Bureau initially sought to block the Rogers-Shaw merger. The Bureau argued that the Tribunal should have evaluated the Rogers-Shaw merger on its own merits first, then addressed whether or not the sale of Freedom Mobile addressed any competition concerns that arise.

But the three-judge panel rejected that argument, saying that it was “fantasy” to examine a merger on its own when that merger would only happen with the divesture of another company. The judges added that, according to the Tribunal’s report, the decision was not close, and the body would have likely came to the same conclusion, had it followed the Bureau’s suggested course.

A joint press release from Rogers, Shaw and Videotron parent company Quebecor welcomed the “clear, unequivocal and unanimous decision,” and said that they would work with Innovation, Science and Economic Development Canada to receive the final approvals needed for their transactions.

Innovation Minister François-Philippe Champagne still needs to approve the transfer of Freedom’s spectrum licenses from Shaw to Videotron in order for the deal to be finalized. Champagne previously said he would wait until court proceedings were completed until offering his decision, though has also said his approval would be contingent on conditions, such as maintaining price levels

In a statement posted to Twitter shortly after the ruling was made, Champagne said he was closely reviewing the court’s decision, and would render his decision “in due course.”

The House of Commons industry committee is also holding a new hearing regarding the merger on Wednesday, the findings of which could influence Champagne’s decision. The committee plans to hear from company executives, government officials and critics of the deal.

Rogers and Shaw have previously stated that their merger would be at risk of falling apart if not closed by Jan. 31, when Videotron’s financing to acquire Freedom expires.