CA - Canada competition body says Freedom mobile sale doesn't resolve Shaw/Rogers concerns (update)

Update 2pm : Adds language from Competition Tribunal document.

Canada's Competition Committee said the proposed sale of Freedom Mobile to Quebecor ( OTCPK:QBCRF ) doesn't resolve the authority's antitrust concerns about Roger's ( NYSE: RCI ) planned purchase of Shaw Communications ( NYSE: SJR )

The Canadian authority said the sale of the Freedom mobile unit is not an effective remedy. Shaw ( SJR ) fell 1.4% and Rogers ( RCI ) dropped 1%.

Last month Rogers Communications ( RCI ), Shaw Communications ( SJR ) and Quebecor entered into a definitive agreement for the sale of Freedom Mobile to Videotron, a subsidiary of Quebecor.

"The proposed divestiture of Freedom Mobile to Videotron (the “Divestiture”) is not an effective remedy,"  Canada's Competition Tribunal wrote in a post on its website dated Friday. "It fails to eliminate the substantial lessening and prevention of competition the Proposed Transaction will cause.  Such a divestiture will not replace the significant and growing competition Shaw Mobile was delivering and would continue to deliver in Alberta and British Columbia, and it would make Freedom Mobile a substantially weaker competitor than it would have been but for the Proposed Transaction."

The story was earlier reported by Reuters.

The deal has already been approved by the shareholders of Shaw and the Court of Queen’s Bench of Alberta, and the Canadian Radio-television and Telecommunications Commission. It remains subject to review by the Competition Tribunal and Competition Bureau and approval by the Minister of Innovation, Science and Industry and other customary closing conditions.

In July Shaw ( SJR ) and Rogers ( RCI ) failed to reach an agreement with Canadian antitrust officials after two days of mediation about the proposed takeover with the Commissioner of Competition.

In late July Rogers ( RCI ) and Shaw Communications ( SJR )  agreed to extend the outside date of their proposed merger to Dec. 31.

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