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

Just Posted

The first Pfizer-BioNTech COVID-19 vaccine dose in Canada is prepared at The Michener Institute in Toronto on Monday, Dec. 14, 2020. THE CANADIAN PRESS/Frank Gunn
One death, 39 new cases of COVID-19 in Interior Health

There are 484 active cases of the virus in the region currently

File photo
Police respond to reports of suspicious visitors in Vavenby

Clearwater RCMP responded to 54 calls for service this past week.

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
65 new cases of COVID-19 in Interior Health

Overall, B.C. is seeing a decrease in COVID-19 cases

FILE - In this April 19, 2021, file photo, Keidy Ventura, 17, receives her first dose of the Pfizer COVID-19 vaccine in West New York, N.J. States across the country are dramatically scaling back their COVID-19 vaccine orders as interest in the shots wanes, putting the goal of herd immunity further out of reach. (AP Photo/Seth Wenig, File)
5 more deaths, 131 new cases of COVID-19 in Interior Health over the weekend

Those 18-years and older in high-transmission neighbourhoods can register for the vaccine

District of Clearwater meetings are open to the public. The meeting agendas and past meetings minutes can be viewed on the DOC's website. Every meeting has time allocated at the end for comments from the public.
District of Clearwater hires new chief adminstrative officer

The new CAO will arrive at the end of June.

Marc Kielburger, screen left, and Craig Kielburger, screen right, appear as witnesses via video conference during a House of Commons finance committee in the Wellington Building in Ottawa on Tuesday, July 28, 2020. The committee is looking into Government Spending, WE Charity and the Canada Student Service Grant. THE CANADIAN PRESS/Sean Kilpatrick
BREAKING: Trudeau didn’t violate conflict rules over WE Charity

Federal ethics commissioner Mario Dion found that former finance minister Bill Morneau did violate the rules

An Israeli attack helicopter launches flares as he flies over the Israeli Gaza border, southern Israel, Thursday, May 13, 2021. (AP Photo/Ariel Schalit)
Singh calls for halt on Canadian arms sales to Israel as violence escalates in region

Government data shows Canada sent $13.7 million in military goods and technology to Israel in 2019

New homes are built in a housing construction development in the west-end of Ottawa on Thursday, May 6, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Budget’s foreign-homebuyers tax could bring in $509 million over 4 years, PBO says

Liberals are proposing a one per cent tax on vacant homes owned by foreign non-residents

A Canadian flag patch is shown on a soldier’s shoulder in Trenton, Ont., on Thursday, Oct. 16, 2014. The Canadian Forces says it has charged one of its members in the death of an army reservist from British Columbia during a training exercise at a military base in Alberta last year. THE CANADIAN PRESS/Lars Hagberg
Canadian Forces member charged in death of army reservist during training exercise

Cpl. Lars Callsen has been charged with one count of negligence

Health Minister Adrian Dix looks during a press conference in the rotunda at Legislature in Victoria, B.C., on Wednesday May 6, 2020. THE CANADIAN PRESS/Chad Hipolito
B.C. to use remaining AstraZeneca vaccine for 2nd doses

Health officials say the change is due to the limited availability of the vaccine

A youth plays basketball in an otherwise quiet court in Toronto on Saturday April 17, 2021. The Canadian Civil Liberties Association is urging the federal and provincial governments to fight COVID-19 pandemic by focusing on proven public health policy interventions including paid sick leave, and education rather than punitive enforcement measures. THE CANADIAN PRESS/Chris Young
Provinces issued more COVID-19 tickets during 2nd wave: CCLA report

‘A pandemic is a public health, not a public order, crisis,’ reads the report

Capt. Arpit Mahajan of the Canadian Forces Snowbirds - Snowbirds 2 - shows off his ‘Jenn Book’ dedicated to Capt. Jennifer Casey. Zoom screenshot
Homecoming for B.C.-raised Snowbirds pilot training in the province

Capt. Arpit Mahajan flies Snowbird 2 in his first year as a solo pilot with the team

BC Housing minister David Eby. (THE CANADIAN PRESS/Chad Hipolito)
Eby jabs back against Penticton mayor’s ad urging BC Premier to intervene in shelter dispute

Eby writes that Penticton’s ‘serious’ social issues won’t improve under leadership of the mayor

What3words was first created in the U.K. in 2013 and is credited to saving the lives of outdoor enthusiasts around the world. (Contributed)
‘This is a life saving tool’: App helps paramedics find capsized canoeists near Revelstoke

What3words pinpoints the person’s phone location to a three-meter range

Most Read