The federal appeals court on Monday stayed the ruling by the competition court that last week gave the green light to Rogers’ $26 billion purchase of Shaw.
• Also read: Shaw-Rogers merger: Minister Champagne continues to study the file
• Also read: Green light for Shaw-Rogers merger: Competition Authority files appeal
• Also read: Competition court clears Shaw-Rogers merger
“[La Cour] granted us a temporary stay (stay) of the court’s decision. This will remain in effect until our request for a stay and injunction can be heard,” the competition bureau said Monday.
The bureau, which opposes Shaw’s merger with Rogers over concerns about losing competition in the telecommunications space, has appealed the Competition Court’s decision.
“We remain very disappointed with the tribunal’s decision. We are carefully examining it and the reasons published last night,” the Bureau added.
Freedom Mobile at the center of the dispute
The presidium and competition court disagree on the implications of a key condition of the merger, namely the sale of Shaw’s subsidiary Freedom Mobile to Quebecor for $2.85 billion.
The Competition Bureau argues that divesting that asset would make Shaw overly dependent on Rogers’ telecommunications systems and ultimately hurt competition in the country.
However, the court sees it differently. In his view, the sale of Freedom Mobile, which operates in western Canada, could boost competition in the country by allowing Videotron to expand across Canada.
“Noting that Videotron is much more motivated than Shaw to become a long-term player in the relevant markets, the court expects Videotron to be a more aggressive and effective competitor than Freedom and Shaw Mobile would be without the merger,” described the court in its detailed reasoning, which is transmitted by “Globe and Mail”.
In addition to the tribunal, the Minister for Innovation, Science and Industry, François-Philippe Champagne, must also give his approval. However, he indicated that he intends to make his decision “only after more clarity on the ongoing court proceedings”.