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  5. BCE: How likely is is that the Feds permit the merger of Rogers and Shaw but then allow foreign ownership of telecoms in Canada. [BCE Inc.]
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Q: How likely is is that the Feds permit the merger of Rogers and Shaw but then allow foreign ownership of telecoms in Canada. If so, which of the two, Telus or Bell, is likely to be bought out? Even if they are not bought out, Bell and Telus might still do better with less competition. Or the Feds may impose conditions on the merger that benefit BCE and Telus. In any event, I am not sure there is any downside to owning Bell or Telus, and the real possibility of capital appreciation. I leave out Cogeco in my analysis as the controlling family appears not interested in a takeover.

Asked by Murray on March 18, 2021
5i Research Answer:

The Shaw takeover is not going to be easy, and we would see quite a lot of regulatory risk to the deal. We highly doubt the Feds will allow foreign ownership to increase and would not see T or BCE as targets. But we agree that taking out a competitor is usually good for the incumbents.