The Rogers logo is photographed in Toronto on Monday, September 30, 2019. Rogers Communications Inc. has signed a deal to buy Shaw Communications Inc. in a deal valued at $26 billion, including debt. THE CANADIAN PRESS/Tijana Martin

The Rogers logo is photographed in Toronto on Monday, September 30, 2019. Rogers Communications Inc. has signed a deal to buy Shaw Communications Inc. in a deal valued at $26 billion, including debt. THE CANADIAN PRESS/Tijana Martin

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

Executives from the two companies revealed few details regarding how they expect to get $1B of synergies

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

The transaction, which would combine Canada’s two largest cable companies as well as their wireless networks, will require a variety of approvals from federal agencies.

Rogers chief executive Joe Natale told analysts in a morning conference call that it’s too early to speculate on whether the competitors will be required to divest any of their operations.

“But we feel confident this transaction will be approved,” Natale said.

There’s little overlap between the Shaw and Rogers cable and internet businesses, which are in western and Eastern Canada respectively, so Natale said he thinks most of the focus will be on their wireless businesses.

“And I won’t get into sort of what is our thinking on that, for obvious reasons,” Natale said.

Rogers owns a national wireless network that does business under the Rogers, Fido and Chatr brands. Shaw owns Freedom Mobile and Shaw Mobile in Alberta, B.C. and Ontario.

Executives from the two companies revealed few details regarding how they expect to achieve $1 billion of synergies, which will be mostly from cost-savings.

However, they did say that savings in operating expenses will likely be more significant than savings from capital spending on equipment.

Rogers chief financial officer Tony Staffieri said that, with the regulatory approvals still at least a year away, there are too many variables to be decided to make predictions on cost cutting.

However, the joint news conference made it clear that the leadership of the two family-controlled companies believe there will be great benefits from the combination.

“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,” Shaw chief executive Brad Shaw said in statement.

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 surged $9.97, or 41.7 per cent, to $33.52 on the Toronto Stock Exchange in early trading.

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.

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

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 requires shareholder and court approvals in addition to regulatory approvals from the Competition Bureau, CRTC and Ministry of Innovation, Science and Economic Development.

The special shareholder meetings are expected to be scheduled for May.

David Paddon, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Internet and Telecom

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Chilliwack RCMP officers on the scene of a spreading brush fire in east Chilliwack between the CN tracks and Highway 1 on April 15, 2021. (Paul Henderson/ Chilliwack Progress)
VIDEO: Firefighters call for helicopter water drop as wildfire expands in Chilliwack

Chilliwack fire crews are on scene at wildfire near Cannor Road, but having difficulty accessing it

Japanese Canadian citizens being transferred into waiting trucks outside Hope Station House. NNMCC L2021-2-1-004. Photographs courtesy of the Nikkei National Museum and Cultural Centre
Fight continues for historic Hope Station House

Ombudsman report and stop work order come alongside district’s move to remove heritage status

Lift equipment is driven away from a fire in an adjacent unit on Industrial Way in Chilliwack on Wednesday, April 14, 2021. (Paul Henderson/ Chilliwack Progress)
Chilliwack firefighters deal with heavy smoke, extreme heat in challenging industrial fire

Crews successful in containing fire to 1 unit in industrial building, adjacent units suffer smoke damage

RCMP on the scene of an alleged attempted murder-suicide on Watson Road in Chilliwack on Thursday, April 15, 2021. (Shane MacKichan)
UPDATE: Shooting leaves one dead, one seriously injured in attempted murder-suicide in Chilliwack

Incident Thursday morning in townhouse complex across from Watson elementary school

A woman wears a protective face covering to help prevent the spread of COVID-19 as he walks past the emergency entrance of Vancouver General Hospital in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
Top doctor warns B.C.’s daily cases could reach 3,000 as COVID hospitalizations surge

There are more than 400 people in hospital, with 125 of them in ICU

A crossing guard stops traffic as students wearing face masks to curb the spread of COVID-19 arrive at Ecole Woodward Hill Elementary School, in Surrey, B.C., on Tuesday, February 23, 2021. A number of schools in the Fraser Health region, including Woodward Hill, have reported cases of the B.1.7.7 COVID-19 variant first detected in the U.K. THE CANADIAN PRESS/Darryl Dyck
COVID-infected students in Lower Mainland schools transmitting to 1 to 2 others: data

Eight to 13 per cent of COVID cases among students in the Lower Mainland were acquired in schools, B.C. says

Dr. Bonnie Henry – in a B.C. health order that went into effect April 12 – granted WorkSafe inspectors the power to enforce workplace closures with COVID-19 spread. THE CANADIAN PRESS/Jonathan Hayward
24 workplace closures being enforced in Fraser Health under new COVID-19 order

WorkSafe inspectors the power to enforce closures if COVID-19 has spread to 3 or more employees

Maple Ridge Fire and Rescue were conducting training operations at Gold Creek Falls when a firefighter broke their leg. (Eileen Robinson photo - Special to The News)
Firefighter suffers broken leg during swift water rescue practice in Golden Ears park

A training exercise at Maple Ridge waterfall on Wedesday results in mishap

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Norm Scott, president of Royal Canadian Legion Branch # 91, is disappointed the Legion does not qualify for COVID financial assistance from the provincial government. (Black Press Media file photo)
B.C.’s pandemic aid package passing Legion branches by

Federal non-profit status stymies provincial assistance eligibility

Latest modelling by public health shows cases generated by COVID-19 infections into places where it can spread quickly. (B.C. Centre for Disease Control)
Industrial sites, pubs, restaurants driving COVID-19 spread in B.C.

Infection risk higher in offices, retail, warehouses, farms

Vancouver Canucks forward J.T. Miller said it would be “very challenging and not very safe” for him and his teammates to play as scheduled on Friday. THE CANADIAN PRESS/Darryl Dyck
Canucks’ return to ice postponed again after players voice COVID health concerns

Friday’s game against the Edmonton Oilers was called off after the team met virtually with the NHLPA

B.C. Attorney General David Eby, Minister Responsible for Housing. THE CANADIAN PRESS/Chad Hipolito
B.C. announces $2B for affordable, middle-income family home projects

New HousingHub financing funds will encourage developers, groups – with low-interest loans – to build affordable homes

Most Read