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Shaw CEO questioned over motives for selling his family business to Rogers

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Brad Shaw, CEO and Executive Chair of Shaw Communications Inc., appears before the CRTC hearings in Gatineau, Quebec on November 22, 2021.Dave Chang/Globe and Mail

Competition Bureau attorneys investigated Shaw Communications Inc. CEO and Chairman Brad Shaw: SJR-BT About $2.3 billion his family would receive if the acquisition of the company by Rogers Communications succeeds. RCI-BT

Shaw said Wednesday in competition court that his family A ‘Very Hard’ Decision Selling a 50-year-old business to Rogers for $26 billion was the right thing to do for all of the company’s shareholders and other stakeholders, including customers and employees.

Shaw said the company has lost market share to Terrace in its Internet and TV businesses and has failed to recoup billions of dollars it has poured into its wireless division, making the necessary investments to remain competitive. There was no scale. Shaw family It controls Calgary-based Telecom through its ownership of Class A voting shares.

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What Happens Next at the Rogers and Shaw Merger Hearings

of The Competition Bureau is trying to block the merger Since Shaw’s Freedom Mobile was sold to Quebecor Inc., it claims the deal will reduce competition in the wireless sector. QBR-BT The $2.85 billion investment will undermine Canada’s fourth-largest wireless carrier.

Competition Bureau adviser Alexander Gay said during cross-examination that the Shaw family would receive cash and about 23 million shares of Rogers stock, which would total about $2.3 billion at a $60 value in Rogers shares. I pointed out that it fits. (Rogers’ shares on the Toronto Stock Exchange on Wednesday closed at $60.06.)

“It may have the most important stakeholder interest, but it’s certainly in a position to profit, and it’s in a position to make a lot of money,” Gay said. “So I find it hard to believe that you’re standing here today suggesting that somehow it’s a constituent issue and not your own.”

Shaw responded that a merger was a last resort for the Shaw family and that “we have considered all other options.”

“At the end of the day, it’s not the dollar that matters. It’s the business and how you support it,” Shaw said.

A key question at the hearing is whether the sale of Freedom to Videotron Ltd., Quebecole’s telecom subsidiary, will maintain a level of competition in the wireless sector.

The Competition Bureau claims Freedom will become a weakened competitor under Videotron’s ownership, as Rogers plans to acquire many of the assets that currently support wireless carriers, including infrastructure and personnel.

In addition, lawyers for the competition watchdog argued that Videotron’s 20-year contract with Rogers to access cable infrastructure in western Canada would expire. Quebec relies on rivals as suppliers.

Shaw believes the structure of the deal between Rogers, Shaw and Videotron puts the Montreal-based telecom company in a “very competitive” position if it is allowed to acquire Freedom. Stated.

“They’ve got a retail network, they’ve got a 5G-ready network, they’re going to scale. I think I do,” he said.

Another attorney at the Bureau of Competition told Donovan Annett, Shaw’s principal strategist and head of strategic architecture and engineering, that if the deal goes through, Rogers has promised to invest $1 billion in remote Indigenous communities in western Canada. I asked about dollars.

Derek Leschinsky, an adviser to the competition commission, said Rogers has not disclosed any details about when and in which local or indigenous communities it will invest.

“Nobody knows what a community is, and if Rogers didn’t invest in it, there wouldn’t be a community. [public] It’s a backlash,” Leschinski said.

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