Eastlink acquisition of Bruce Telecom in trouble?


The transaction that would have seen Bragg Communicationss, the parent company of Eastlink, acquire Bruce Telecom for CA$26.5 million appears to be in trouble. Canada’s competition bureau has ruled that the deal would not be in the interests of the residents of the Kincardine municipality as it would likely reduce choices and increase prices:

“Our review concluded that Eastlink’s acquisition of Bruce Telecom would have likely resulted in higher prices and fewer choices for the supply of telecommunications services to the residents of the towns of Port Elgin and Paisley. In the absence of the dynamic rivalry that exists between Eastlink and Bruce Telecom, customers would also have been deprived of the benefits of innovation in their telecommunications services.”

The Competition Bureau added that, in light of its decision, Bragg and Bruce Telecom have decided to walk away from the deal. But the Municipality of Kincardine, Bruce Telecom’s owners, quickly issued a statement that it had not been consulted about the Competition Bureau’s press release and that “the parties have not terminated their agreement.”

As well, it is not true that the Municipality of Kincardine has decided to abandon the proposed transaction. Council for the Municipality has not received nor had an opportunity to consider the subject matter of the Bureau’s press release.

The Municipality of Kincardine is seeking a correction from the Bureau.

It remains to be seen if the Eastlink acquisition of Bruce Telecom is well and truly dead or if the two companies will try to make modifications to it to gain support from the Competition Bureau.

Sources : Competition Bureau // Municipality of Kincardine