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Noah Zivitz

Managing Editor, BNN Bloomberg

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Rogers Communications Inc. and Shaw Communications Inc. were unable to resolve concerns about their tie-up in mediation with the country’s competition watchdog, the companies said Wednesday. 

In a short statement, Rogers and Shaw said the regulatory review process will continue as planned.

Rogers announced its $20-billion friendly takeover arrangement with Shaw in March 2021.

While the transaction has been approved by the Canadian Radio-television and Telecommunications Commission, it still requires the blessing of Canada’s industry minister and the Competition Bureau.

Competition Commissioner Matthew Boswell has objected to the deal, saying it would lessen competition, regardless of Rogers’ plan to divest Shaw’s Freedom Mobile wireless business.

Mediation between the two companies and Boswell took place earlier this week; Rogers and Shaw said in their statement they are “not precluded from continuing discussions with the Commissioner at any time.”

A spokesperson for the Competition Bureau declined to comment on the mediation’s outcome.

“The Bureau is required by law to conduct its work confidentially, including any remedy negotiations between the Bureau and merging parties. Given this matter is before the courts, we are not in a position to comment further, nor would it be appropriate to speculate about potential outcomes,” Marie-Christine Vézina said via email.

Shaw’s Class B shares slipped Wednesday morning on the Toronto Stock Exchange, drifting further away from the $40.50-per-share takeover offer that they’ve never reached since the deal was announced, which is indicative of skepticism about the transaction’s fate.

“Our view remains that the July 31 outside date, which was not changed in [Wednesday’s] press release, could get extended further. Inasmuch as the T-Mobile and Sprint merger had to endure a two-year approval process, it's likely in the interests of all companies involved to get this matter resolved prior to the fall and ahead of important back-to-school and later Thanksgiving-Christmas retail shopping periods,” wrote National Bank of Canada Financial Markets Adam Shine in a report to clients.

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