Rogers and Shaw ink $26bn acquisition deal in Canada

Rogers and Shaw ink $26bn acquisition deal in Canada

16 March 2021 | Natalie Bannerman

Cover

Rogers Communications has made an agreement worth $26 billion to acquire all of Shaw Communications’ class A and B shares.

The deal prices Shaw’s shares at approximately $40.50 per share, a premium for Shaw’s shareholders, and the $26 billion price tag includes $6 billion of Shaw’s debts.

“We are proud to join forces with the Shaw family and team as we combine our companies and our 10,000 team members across Alberta, British Columbia, Manitoba, and Saskatchewan, supported by a head office in Calgary.

Western Canada is a major driver of our national economy and together we will have the scale, expertise and commitment to deliver the technology infrastructure needed to keep local communities connected, businesses competitive and attract new investment,” said Joe Natale (pictured), president and CEO of Rogers Communications.

“Fundamentally, 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.”

The soon to be combined entity will create many benefits by bringing together two family-founded Canadian companies. Synergies are expected to exceed $1 billion annually within two years of closing. Through this deal, the Shaw family will become one of the largest shareholders in Rogers.

Together, the new business will have the scale, assets and capabilities needed to deliver wireline and wireless broadband and network investments, innovation and growth in new telecoms services to the Canadian market.

“Today’s announcement brings two iconic Canadian family-founded businesses together with the expertise, combined assets, and scale to deliver the next generation of telecommunications to Canadian consumers and businesses,” said Edward Rogers, chairman of Rogers Communications.

“This is a transformational combination; and extends our company’s long legacy of innovation, entrepreneurship, and dedication to world-class service for decades to come.”

The new company will invest $2.5 billion in 5G networks over the next five years across Western Canada. With such investments as these, the new entity will create close to 3,000 new jobs across Alberta, British Columbia, Manitoba and Saskatchewan.

Additionally, Rogers has announced plans to establish a $1 billion Rogers Rural and Indigenous Connectivity Fund to connect rural, remote and Indigenous communities across Western Canada to high-speed Internet.

As part of this fund, Rogers will work with Indigenous communities to create Indigenous-owned and operated Internet Service Providers, leveraging Rogers’ expanded networks and capabilities.

A further Additional $3 billion will be spent to support additional network, services, and technology investments.

“Our two companies have been successful because of the foresight and vision of two great founders who were driven by their unrelenting pioneering spirit and entrepreneurial values. Without a doubt, my father would be proud of this moment, combining forces with the company founded by his old friend to deliver more Canadians world class connectivity, more choice, and better value,” said Brad Shaw, executive chair & CEO, Shaw.

“While unlocking tremendous shareholder value, combining these two great 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. This transaction will create benefits for generations to come.”

Subject to customary closing conditions including court, stock exchange and regulatory approval, the transaction is due to close in the first half of 2022.