By Maiya Keidan

A Canadian court on Tuesday dismissed the competition bureau’s effort to overturn an approval of Rogers Communications Inc’s (RCIb.TO) C$20 billion (US$14.9 billion) bid to buy Shaw Communications Inc.

Commissioner of Competition, Matthew Boswell said in a statement that the bureau was “truly disappointed” but it would not be pursuing a further appeal.

The deal to create Canada’s No. 2 telecoms operator was struck nearly two years ago and the companies are now racing to close it before a Jan. 31 deadline. They have, however, previously extended the deadline in the past.

The Canadian government still needs to approve the deal and Industry Minister Francois-Philippe Champagne, who has the final say, said in a statement he would review the court ruling. He added that competition and affordability in the telecoms sector remained a top priority.

The deal, which has faced opposition from consumer advocates, politicians and rival telecom companies, was a test case for the competition bureau’s ability to increase choices for consumers in Canada, where a handful of companies control large swaths of business.

But the antitrust agency failed to convince courts that the transaction is bad for consumers in a country where wireless bills are already among the highest in the world. Rogers and Shaw shares extended gains on the decision, and both closed about 3 per cent higher, while the benchmark Canadian share index  was flat.

The Federal Court of Appeal in Ottawa swiftly dismissed the antitrust regulator’s appeal to overturn a Dec. 30 decision by the Competition Tribunal to approve the deal. It did so without hearing from Rogers and Shaw.

The government has accepted Rogers’ offer to sell Shaw’s Freedom Mobile unit to Quebecor’s (QBRb.TO) Videotron for C$2.85 billion to address antitrust concerns. But the competition bureau argued that a merged Rogers-Shaw would not have a viable competitor in Quebecor.

Justice David Stratas told the court that many of the points of law the antitrust agency had raised were “without merit.”

He said the Competition Tribunal had not found it to be a particularly close case. “It found, I would say, on the evidence rather decisively that there was no substantial lessening of competition.”

“They also found a number of pro-competitive considerations.”                                                     

Shaw, Rogers and Quebecor said in a joint statement on Tuesday that “we welcome this clear, unequivocal, and unanimous decision by the Federal Court of Appeal.”

The companies said they will continue to work with Innovation, Science and Economic Development Canada to secure the final approval needed.

Opponents of the deal said it would hurt ordinary Canadians.

“Rogers buying Shaw means less choice and more expensive prices for every consumer in Canada,” said  campaigns director at OpenMedia, a lobby group that campaigns to keep internet access easy and affordable, Matt Hatfield.

• Reporting by Maiya Keidan in Toronto, additonal reporting by Chavi Mehta, Ismail Shakil and Jaiveer Shekhawat; Editing by Denny Thomas, Deepa Babington and Edwina Gibbs