merger – mackaycartoons

Friday March 19, 2021

March 26, 2021 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday March 19, 2021

A big deal threatens bigger cellphone fees

There are two things you can bet on when it comes to this week’s $20.4-billion bid by Rogers Communications to snap up rival Shaw Communications.

First, the deal would be very good for both of these telecommunications giants, and not least members of the Shaw family who would personally pocket $920 million in cash for their troubles.

Second, the current takeover plan threatens to be very bad for Canadian consumers, and that probably means people like you.

Think your monthly cellphone fees are sky-high today? They could blast into the stratosphere if this deal goes through as is. Because if one of Canada’s four biggest telecom companies is bought up by one of the others, there will be even less of the competition so urgently needed to keep some kind of a lid on prices.

Let’s hope Prime Minister Justin Trudeau is watching this one closely. Let’s hope even more that he’s ready to stand up for the interests of ordinary Canadians. The fact is, cellphone users in this country are already saddled with some of the most bloated cellular fees in the industrialized world. On average, Canadians spend 20 per cent more than Americans and an eye-watering 120 per cent more than Australians for cellphone plans that offer comparable service.

Canada’s “Big 3” telecom companies — Rogers, Telus and Bell — defend the high prices as the cost of providing a first-rate service in a vast land, though the U.S. and Australia are also pretty big places where bills are a lot lower than here. It’s also worth noting that a review by Canada’s Competition Bureau found that those Big 3 telecom companies, however they excuse their pricing, were racking up far stronger profits than their Group-of-Seven or Australian counterparts.

One of the problems industry analysts consistently point to is the lack of competition for providing wireless services in Canada. Today, Rogers, Telus and Bell control nearly 90 per cent of the market. If Rogers is allowed to gobble up Shaw, the Big 3’s market share will rise to 95 per cent.

Federal government after federal government has agreed more, not less, competition is what this sector needs. And they were all correct. Freedom Mobile, which was started by Shaw in 2016, has been credited with driving wireless plan prices down to at least some degree in Ontario, Alberta and British Columbia.

So what happens if big-fish Rogers swallows up smaller-fish Shaw and takes over not just Shaw’s cable and internet operations in western Canada but its Freedom mobile business? Rogers has tried to silence concerns about its takeover plans by promising not to raise cellphone fees for three years. However sincere that offer is, it would do nothing to stop a whopping fee hike on Day 1 of Year 4.

While Trudeau knows that telecommunications companies need to earn enough money to underwrite expensive investments in internet and wireless networks, he and his party declared they would lower cellphone fees by 25 per cent by the end of 2021.

Given that both the Competition Bureau and the Canadians Radio-television and Telecommunications Commission will now take a year or more to review this deal, Trudeau has time to think this one out carefully. But at the end of the day he should be willing to intervene strongly on behalf of consumers. One option among many would be to approve the deal — if Rogers agrees to sell Shaw’s Freedom Mobile business to a company such as Cogeco, which is interested in expanding into the cellphone business.

Such a deal between Rogers and Shaw might not be as big. Almost certainly, neither would the cellphone bills be in this country. (Hamilton Spectator Editorial)

Tuesday August 26, 2014

August 25, 2014 by Graeme MacKay

By Graeme MacKay, The Hamilton Spectator – Tuesday August 26, 2014

Tim Hortons, Burger King shares surge on merger talk

Shares in Burger King and Tim Hortons have jumped dramatically in pre-market trading in New York on news the two companies are talking about joining forces.

It’s not know what such a deal would be worth, but both stocks surged with U.S.-based Burger King up 16.2 per cent to US$27.11. Shares in Tim Hortons jumped 16.96 per cent to US$62.84.

If Burger King joins forces with Tim Hortons, the new publicly traded company would be based in Canada and would have tax advantages for the U.S.-based burger chain.

Burger King would be able to shave its American tax bill in what’s called a tax inversion, something that has become increasingly popular among U.S. companies trying to cut costs.

In an inversion, a U.S. company reorganizes in a country with a lower tax rate by acquiring or merging with a company there. Inversions allow companies to transfer money earned overseas to the parent company without paying additional U.S. taxes. That money can be used to reinvest in the business or to fund dividends and buybacks, among other things.

Companies like AbbVie, a pharmaceutical with its headquarters just outside Chicago, have tied up with companies overseas to achieve that type of tax cut.

More recently, Walgreen, the huge retail chain, backed away from such a plan under intense pressure in what is becoming an increasingly hot political issue in the United States.

Under a deal between Burger King and Tim Hortons, 3G Capital, the majority owner of Burger King, would continue to own the majority of the shares of the new company on a pro forma basis, with the remainder held by existing shareholders of Tim Hortons and Burger King.

Both companies have confirmed they are talking and have said Oakville, Ont.-based Tim Hortons and Miami-based Burger King would operate as standalone brands, if the deal goes ahead. (Source: Global News)

Editorial Cartoon, Business, Canada, Tim Hortons, Burger King, merger, corporation, taxes

December 10, 2003

December 10, 2003 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – December 10, 2003

Tory stalwart Joe Clark partyless

The new Conservative Party of Canada lost three MPs yesterday, hours after a proud announcement that it had officially registered for business and begun operations.

Former Tory leader Joe Clark and fellow MPs Andre Bachand of Quebec and John Herron of New Brunswick said they couldn’t bring themselves to participate in the new organization, formed through a merger with the Canadian Alliance.

“This is not my party,” Clark said as he arrived for what he called his last Tory caucus meeting. “This is something entirely new. I will not be part of this new party.”

Herron, like Clark, said he had notified Speaker Peter Milliken that he would serve out his current term but would keep calling himself a Progressive Conservative — the old party name that was ditched in the merger.

“I sought a mandate to be elected as a Progressive Conservative,” Herron said. “I plan on fulfilling my mandate.”

In effect, Clark and Herron will be treated as independents under Commons rules, with reduced opportunity to ask questions, participate in debates and serve on committees.

Bachand, who has been courted by the federal Liberals, said he hasn’t decided whether to remain in politics but, if he does, it won’t be under the banner of the new Conservative party. (Source: Hamilton Spectator)

Wednesday December 10, 2003