Canada’s federal government says it won’t allow Rogers Communications (RCI.B) to acquire all of the wireless spectrum owned by Shaw Communications (SJR.B) if the two companies successfully close a proposed $16 billion U.S. takeover
In a written statement, Industry Minister Francois-Philippe Champagne said: “The wholesale transfer of Shaw’s wireless licenses to Rogers is fundamentally incompatible with our government’s policies for spectrum and mobile service competition, and I will simply not permit it.”
The statement doesn’t kill Rogers’ takeover of Shaw. But Champagne’s comment underscores that Toronto-based Rogers will have to make concessions to complete its $40.50-a-share takeover of Calgary-based Shaw. The deal is still under regulatory reviews, including one by Canada’s antitrust agency.
The minister’s statement came after markets closed in Canada. Shaw closed down 0.6% to $38 in Toronto trading. Rogers stock rose 0.8% to $67.80.
If the transaction succeeds, most of Canada will have only three wireless carriers to choose from instead of four.
Rogers, BCE (BCE) and Telus (T) dominate the Canadian wireless industry. The federal government has tried to create more competition by allocating wireless licenses that only new players can buy, and it has the right to veto the proposed sale or transfer of licenses to the big three.
Shaw, which has about 2.2 million wireless customers to Rogers’ 11.3 million, has benefited from the government’s policy by acquiring some of that “set-aside” spectrum.
