(Recasts first sentence with effort to overcome regulator's
antitrust issues, adds analyst comment, details of mediation
process, company background, share action)
TORONTO, June 24 (Reuters) - Rogers Communications Inc
, Shaw Communications Inc and Canada's
competition bureau have agreed to start a mediation process to
overcome the agency's antitrust issues posed by Rogers' C$20
billion ($15.5 billion) acquisition of Shaw, the competition
tribunal said on Friday.
The move follows weeks of back and forth between the parties
after the antitrust agency blocked Rogers' bid, saying the deal
will reduce competition in Canada's concentrated telecoms
industry and push up wireless bills.
While Rogers offered a concession last week by agreeing to
sell Shaw's Freedom Mobile to Quebecor Inc for C$2.85
billion, the competition bureau said the remedy measures must
uphold competition in the wake of the merger.
The mediation could pave the way for a settlement, and avoid
a protracted legal battle in the Competition Tribunal, which
decides the fate of contested deals.
"It is a sign to us that competition commissioner is not
ideologically opposed to the transaction so there is a path
towards conditional approval," said Aaron Glick, a director with
New York-based Cowen LLC.
The Competition Tribunal told Reuters in a statement that
"the parties have advised the tribunal that they wish to
participate in the mediation set for July 4th and 5th," adding
that all information related to any mediation would be
Rogers' proposed acquisition of Shaw comes as high mobile
prices remain a hot-button issue in Canada, with customers
paying the highest wireless bills in the world. The top three
companies - Rogers, BCE Inc and Telus Corp -
account for almost 90% of the industry's revenue.
With the parties agreeing to the mediation process, the fate
of the deal, which was launched in March 2021, could be a step
Reuters reported on Thursday the bureau was expected to seek
a divesture of Shaw's cellular business known as Shaw Mobile to
overcome antitrust concerns. In a filing last week, the bureau
said that among other factors Shaw Mobile was a lead driver of
growth for Shaw and it would have expanded if not for the buyout
The parties will argue their case before a tribunal judge
during the mediation process, who would offer possible solutions
to resolve the dispute. If the parties agree to the solutions
proposed by the judge then they could sign a consent agreement
that would pave way for clearing the deal, a lawyer familiar
with the process told Reuters.
If they fail to agree, however, the matter will go to a
trial which is expected to start in November. An outcome would
be expected by year-end.
Shaw shares closed 1.5% higher at C$38.25 in Toronto on
Friday. Rogers shares gained 1.4% to close at C$62.43.
($1 = 1.2921 Canadian dollars)
(Reporting by Divya Rajagopal in Toronto; Writing by Ismail
Editing by Leslie Adler and Matthew Lewis)