Rogers Deal for Shaw Gets New Hurdle as Canada Adds Conditions

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(Bloomberg) — The Canadian government has set out new conditions for Rogers Communications Inc.’s proposed takeover of rival Shaw Communications Inc., saying that a side deal to settle antitrust problems must guarantee better wireless prices for consumers. 

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Rogers and Shaw have agreed to sell most of Shaw’s wireless assets to Montreal-based Quebecor Inc. in an effort to solve competition concerns stalling their C$20 billion ($14.7 billion) merger. Industry Minister Francois-Philippe Champagne said Tuesday he would only let the deal go through if Quebecor agrees to hold those wireless licenses for at least 10 years. 

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Champagne also said he would “expect” to see wireless prices in Ontario and Western Canada, where Shaw offers service to more than 1.5 million customers, decline so that they’re comparable to what Quebecor offers today in its home province of Quebec. 

It’s not clear whether Quebecor, controlled by Pierre Karl Peladeau, will agree to the Shaw deal under the new terms Champagne outlined during his news conference in Ottawa. 

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The minister also said he has formally blocked the transfer of Shaw’s wireless licenses to Rogers — fulfilling a promise he made earlier in the year. That pledge, plus the Competition Bureau’s opposition to the deal, has made it clear for months that there will be no takeover at all unless Rogers and Shaw can find a buyer for the latter’s wireless division. They struck the deal with Quebecor in June for C$2.85 billion. 

Rogers and Shaw are due to enter mediation talks with the Competition Bureau this week to try to come to an agreement to resolve antitrust concerns. Rogers has put forward a settlement proposal, the Globe and Mail newspaper said Tuesday. 

(Updates with further information)