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

The new study commissioned by the City of Terrace will evaluate environmentally sensitive areas around Ferry Island and the airport lands. (Binny Paul/Terrace Standard)
City to update two decades old environmentally sensitive areas report

New study will document areas excluded from previous 1998 report

Jessica McCallum-Miller announced on her Facebook page that she is the recipient of the Lieutenant Governor’s Medal for Inclusion, Democracy and Reconciliation on April 17, 2021. (Jessica McCallum-Miller/Facebook)
Jessica McCallum-Miller to receive Lieutenant Governor’s Medal

Former Terrace councillor, Coast Mountain College student ‘honoured’

B.C. Finance Minister Selina Robinson outlines the province’s three-year budget in Victoria, April 20, 2021. (B.C. government video)
B.C. deficit to grow by $19 billion for COVID-19 recovery spending

Pandemic-year deficit $5 billion lower than forecast

Skeena Valley Farmers Market is expected to kick off its 2021 season from May 1, with COVID-19 safety protocols in place ( Skeena Valley Farmers Market/Facebook)
Skeena Valley Farmers Market on track to reopen next month

The first market day of the season will be held on May 1, at George Little Park

Coast Mountains School District 82 announced a shuffle of leadership positions in Terrace and the Hazeltons for the upcoming 2021/22 school year. (Black Press Media File Photo)
Coast Mountains School District 82 announces leadership shuffle

Several principal, vice-principal positions in Terrace affected

A lone traveler enters the Calgary Airport in Calgary, Alta., Monday, Feb. 22, 2021. THE CANADIAN PRESS/Jeff McIntosh
VIDEO: Trudeau defends Canada’s travel restrictions as effective but open to doing more

Trudeau said quarantine hotels for international air travellers will continue until at least May 21

B.C.’s 2021 budget is trending in the right direction to support farmers, says the BC Fruit Growers’ Association. (Phil McLachlan - Capital News)
BC Fruit Growers’ Association gives thumbs up to provincial budget

BCFGA general manager said budgetary investments put farming industry on a good trajectory for recovery

B.C. Finance Minister Selina Robinson leaves the assembly with Premier John Horgan after the budget speech Tuesday, April 20, 2021. THE CANADIAN PRESS/Chad Hipolito
Paid sick leave for ‘hard-hit’ workers left out of provincial budget: BCGEU

‘For recovery to be equitable it requires supports for workers, not just business,’ says union president Laird Cronk

A large crowd protested against COVID-19 measures at Sunset Beach in Vancouver on Tuesday, April 20, 2021. (Snapchat)
VIDEO: Large, police-patrolled crowds gather at Vancouver beach for COVID protests

Vancouver police said they patrolled the area and monitored all gatherings

In this image from video, former Minneapolis police Officer Derek Chauvin, center, is taken into custody as his attorney, Eric Nelson, left, looks on, after the verdicts were read at Chauvin’s trial for the 2020 death of George Floyd, Tuesday, April 20, 2021, at the Hennepin County Courthouse in Minneapolis, Minn. THE CANADIAN PRESS/Court TV via AP, Pool
George Floyd’s death was ‘wake-up call’ about systemic racism: Trudeau

Derek Chauvin was found guilty Tuesday on all three charges against him

Former University of Victoria rowing coach Barney Williams is photographed in the stands during the Greater Victoria Invitational at CARSA Performance Gym at the University of Victoria in Victoria, B.C., on Friday, November 29, 2019. THE CANADIAN PRESS/Chad Hipolito
Rowing Canada sanctions former head coach of B.C. varsity women’s team

Suspension of Barney Williams would be reversed if he complies with certain terms

A man pauses at a coffin after carrying it during a memorial march to remember victims of overdose deaths in Vancouver. THE CANADIAN PRESS/Darryl Dyck
B.C. announces historic half-billion-dollar funding for overdose crisis, mental health

Of it, $152 million will be used to address the opioid crisis and see the creation of 195 new substance use treatment beds

Most Read