Mar 1, 2023
Industry minister faces anger no matter what he decides on Rogers-Shaw: Analyst
The Rogers-Shaw deal could be delayed by a few months: Dvai Ghose
Canada's industry minister has no good options as he considers whether to approver Rogers Communications Inc.’s $20-billion takeover of Shaw Communications Inc., according to one industry expert who predicts the minister could take months to come to a final decision.
The companies have set March 31 as the closing date for the drawn-out telecommunications sale, which has been extended multiple times as the parties cleared most major legal hurdles. The deal still needs approval from Industry Minister François-Philippe Champagne.
Despite the looming deadline, telecom consultant Dvai Ghose said he expects Champagne could take another three to four months to decide whether to approve the sale, as he faces anger from corporate Canada if he rejects it, or from Canadian consumers if he approves it.
“You can perhaps understand why he's procrastinating,” said Ghose, who is also CEO of Ghose Investment Corp.
“If he rejects the deal, then Bay Street will go crazy and say, ‘So you're rejecting all (mergers and acquisitions)? Why was this rejected?’ And there's an argument there. On the other hand, if he accepts the deal, then every consumer group, the NDP, many Conservatives and even members of the Liberal parliamentary group are generally concerned about the deal.”
Canada’s competition czar opposed the sale before the Competition Tribunal, arguing it would lead to worse, more expensive service for Canadians and lessen competition—concerns that have been echoed by other critics.
The Tribunal rejected those arguments and sided with the companies, who had argued that the sale would not lessen competition because they planned to sell Shaw’s Freedom Mobile to Quebecor for $2.85 billion. The Federal Court of Appeal later dismissed an application from the Competition Bureau to overturn the Tribunal decision.
Ghose said Champagne’s decision-making is further complicated by the Quebecor aspect of the deal, and uncertainty about whether conditions aimed at maintaining competition in the sector will play out as intended.
Deciding quickly could also appear as if Champagne is “being bullied” by the companies, Ghose said, pointing to another reason the minister may take his time.
“If I were him, I'd delay as well, and that's exactly what I expect,” he said.