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

Vernon residents were able to bring propane fire pits down to Polson Park, between Jan. 25 - April 5 to enjoy with their family bubble, similar to those provided for residents at Predator Ridge. (Jennifer Smith - Morning Star)
Fire pits a flop in Vernon’s Polson Park

City spends estimated $2K on temporary program, few, if any take advantage; option closed now

Sheila Derbyshire dressed up as a scary clown to surprise her daughter, Talyn, at Len Wood Middle School in Armstrong April 12, 2021, for her 13th birthday. (Sheila Derbyshire - Contributed)
Armstrong mom sends in the clowns

‘Halloween freak’ celebrates daughter’s 13th birthday in style

Taxes are going up slightly for homeowners in 2021 to give businesses a break. (Jennifer Smith - Morning Star)
Tax shifts burden from Vernon businesses to homeowners

New rate for residential 2.67 per cent or $42 for average home

City of Armstrong community services manager and chief bylaw officer Warren Smith stands with the new food waste bin and garbage cart to be delivered to eligible residents later this month. (Brooke Hovey photo)
Armstrong changes waste collection system

Residents to be given new bins as part of the new system which goes into effect May 1

Pixabay.
Non-stop flights between Ottawa and Kelowna to be offered this summer

One-way flights start as low as $59 with taxes and fees included

Burnaby MLA Raj Chouhan presides as Speaker of the B.C. legislature, which opened it spring session April 12 with a speech from the throne. THE CANADIAN PRESS
B.C. NDP promises more health care spending, business support in 2021 budget

John Horgan government to ‘carefully return to balanced budgets’

A five-storey, 60-unit building has been proposed for 8709 Jubilee Rd. E., Summerland. The proposal will be the subject of a public hearing on March 22. (Image by GTA Architecture)
Zoning, OCP amendments adopted for Summerland housing development

Additional variances will be needed for controversial five-storey, 60-unit housing development

Guinevere, lovingly referred to by Jackee Sullivan and her family as Gwenny, is in need of a gynecological surgery. The family is raising money to help offset the cost of the procedure. (Jackee Sullivan/Special to Langley Advance Times)
Langley lizard’s owners raise funds for gynecological surgery

The young reptile is scheduled for operation on Tuesday

Facebook screenshot of the sea lion on Holberg Road. (Greg Clarke Facebook video)
VIDEO: Sea lion randomly spotted on remote B.C. logging road

Greg Clarke was driving home on the Holberg Road April 12, when he saw a large sea lion.

Defence counsel for the accused entered two not guilty pleas by phone to Grand Forks Provincial Court Tuesday, Jan. 12. File photo
B.C. seafood company owner fined $25K for eating receipt, obstructing DFO inspection

Richmond company Tenshi Seafood is facing $75,000 in fines as decided March 4 by a provincial court judge

B.C. Finance Minister Selina Robinson speaks in the B.C. legislature, March 2, 2021. (Hansard TV)
B.C. NDP ministers defend ‘air tax,’ latest COVID-19 business aid

Empty home tax doesn’t apply to businesses, but space above them

Lime e-scooters will soon be offered in Kelowna. (Photo: Kris Krug)
E-scooters now allowed on Kelowna roadways under provincial pilot program

‘Rather than a novelty, this change will enable e-scooters to be used for more utilitarian transportation purposes’

Air Canada cancelled service to and from Penticton Jan. 11, 2021. After receving $5.9 billion in federal aid the airline is now set to renew service on the route in June, 2021. (Mark Brett - Western News file)
Air Canada flights set to return to the South Okanagan

Federal aid could have the Vancouver/Penticton route back to pre-pandemic service

(Aaron Hemens - Kelowna Capital News)
Man found tangled in barbed wire on trail near UBC Okanagan

Man’s friend claims he’d been drinking when he went missing Monday afternoon

Most Read