Wednesday, November 29

Rogers’ $26-billion merger with Shaw could close this year, says CEO

‘We think we’ve addressed all the issues the government has put in front of us’

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Tony Staffieri, the chief executive of Rogers Communications Inc., said his company’s $26-billion merger with rival Shaw Communications could close this year if mediation with the Competition Bureau next month resolves concerns.

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“We welcome a dialogue to try to close this then or even before that,” he said at a BMO Capital Markets conference Tuesday morning.

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Staffieri said the deal could close in 2022 even if talks in late October fail and a Competition Tribunal hearing scheduled to begin Nov. 7 wraps up within “a few weeks” as a result of a “remedy” Rogers and Shaw have lined up to sell Shaw’s wireless division to Quebecor Inc. subsidiary Vidéotron Ltd.

Nevertheless, he noted that the transactions also need approval from Innovation, Science and Economic Development Canada, and said the companies have extended their agreements into 2023 as well as the deal’s financing.

“There is a possibility to get a decision from the tribunal this year,” Staffieri said, adding that he is “disappointed” it is taking so long.

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“We think we’ve addressed all the issues the government has put in front of us.”

Staffieri said the impact on Rogers of last summer’s day-long wireline and wireless outage, which had widespread ripple effects on 911 emergency calls and electronic Interac financial transactions, was “isolated” and “small but manageable” in terms of the company’s wireless subscriber base and financials.

The company is “back to levels we were previously at,” he said, noting that a $150-million charge to compensate customers will affect revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter.

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The July 8 service outage that directly affected 12 million Rogers subscribers came on the heels of the Competition Bureau’s announcement in May that it would seek to block Rogers’ transformational merger with Shaw after concluding the combination of the two telecom giants would lessen wireless competition and lead to higher prices for consumers.

At that time, an initial remedy proposed by the companies to alleviate those concerns by offloading wireless assets was rejected by the competition authority. Quebecor, which had not initially been included in talks with Rogers’ advisers, was invited to the table, and the $2.85 -million sale of Shaw’s Freedom Mobile business to Quebecor’s Vidéotron division was announced June 17 and finalized in August.

The price tag was lower than analyst estimates, which had pegged the value of Freedom at closer to $4 billion.

Rogers and Shaw first announced their blockbuster merger on March 15, 2021.

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