Rogers signs deal to buy Shaw in deal valued at $26B

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Rogers

Rogers Communications Inc. announced an agreement Monday to buy Shaw Communications Inc. in a deal valued at $26 billion, including debt.

Under the plan, Rogers will pay holders of Shaw’s class A and B shares $40.50 in cash per share, while the Shaw family will receive some of their payment in Rogers shares.

Shaw’s Class B shares closed at $23.90 on the Toronto Stock Exchange on Friday.

As part of the transaction, the companies said Rogers will invest $2.5 billion in 5G networks over the next five years across Western Canada.

Rogers also says it will create a new $1-billion fund dedicated to connecting rural, remote and Indigenous communities across Western Canada to high-speed internet service.

“This combination of two great companies will create more jobs and investment in Western Canada, connect more people and businesses, deliver best-in-class-services and infrastructure across the nation, and provide increased competition and choice for Canadian consumers and businesses,” Rogers CEO Joe Natale said in a statement.

The combined company will create a Western regional headquarters in Calgary, where the president of Western operations and other senior executives will be based.

Shaw executive chair and CEO Brad Shaw said the transaction will create benefits for generations to come.

“While unlocking tremendous shareholder value, combining (the) companies also creates a truly national provider with the capacity to invest greater resources expeditiously to build the wireline and wireless networks that all Canadians need for the long term,” Brad Shaw said in statement.

Rogers said it has secured committed financing to cover the cash portion of the deal, while about 60 per cent of the Shaw family shares which will be exchanged for 23.6 million Rogers B-class shares.

Brad Shaw, and another director to be nominated by the Shaw family — which will become one of the largest Rogers shareholders — will be named to the Rogers board.

The deal, which requires shareholder approval, is subject to other customary closing conditions, as well as approvals from Canadian regulators.

Sault Ste. Marie has Shaw’s most eastern outlet with most of Ontario being serviced by Rogers.

It is expected to close in the first half of 2022.

Companies in this story: (TSX:RCI.B, TSX:SJR.B)

 

7 COMMENTS

  1. Hopefully no price hike….seniors on small pensions will not be able to afford!
    I am pretty well stretched on what I now pay for shaw.

  2. Right now there are Shaw and Bell. So now it will be Rogers and Bell. Not really a change from the two choices we have now

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