Rogers and Shaw agree to injunction that temporarily blocks their merger closing

The Competition Bureau says Rogers Communications Inc. and Shaw Communications Inc. have agreed to a preliminary injunction that prevents them from closing their proposed $26-billion merger until the Competition Tribunal hears a challenge from the commissioner.

The regulatory agency says Rogers and Shaw have also agreed to the commissioner of competition’s request for an expedited hearing process before the tribunal.

On May 9, the bureau filed an application to block Rogers’ purchase of Shaw, arguing that the transaction would lead to worse service and higher prices for consumers.

It also alleged that removing Shaw as a competitor would undo the progress made on competition in Canada’s telecom sector over the years.

Rogers and Shaw said they would press ahead with the deal and fight the commissioner’s efforts to block it.

Other government agencies, including the CRTC, have already signed off on portions of the deal under certain conditions, but the Competition Bureau’s opposition is emerging as an unexpectedly large stumbling block.

In March, Industry Minister François-Philippe Champagne made it clear the government would not allow the merger to go ahead if it meant that Rogers would retain all of Shaw’s wireless spectrum licenses, most of which consist of Freedom Mobile and its roughly two million cellphone customers across Ontario, B.C. and Alberta.

Champagne’s ministry has also yet to sign off on the deal.

According to the bureau, Rogers has agreed to not do anything “that limits Shaw’s ability to operate, maintain, enhance or expand its wireless business.”

A spokesperson for Rogers did not immediately reply to a request for comment by CBC News on Monday.

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