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

Asymptomatic testing will now be available for "priority groups" who are most likely to spread the COVID-19 virus to vulnerable or at-risk populations. File photo by THE CANADIAN PRESS
A judge has found an Edmonton woman guilty of manslaughter in the death of her five-year-old daughter. THE CANADIAN PRESS/Jason Franson
Edmonton mother found guilty of manslaughter in death of 5-year-old girl

The woman was charged and pleaded not guilty to second-degree murder and assault with weapons, including a belt and a spatula

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
Alberta identifies 2,042 new COVID-19 cases Saturday

Central zone has 2,917 active cases

Alberta Premier Jason Kenney. THE CANADIAN PRESS/Jason Franson
Jason Kenney urges federal government to push U.S. for surplus COVID-19 vaccines

‘It makes no sense for our neighbours and regional states to be sitting on doses that we cannot use,’ the premier said

Winfield 4-H Club. (Photo Submitted)
Winfield & District 4-H Beef Club News

The 4-H Club gives an update on how what the club has been up to this year

Dr. Karina Pillay, former mayor of Slave Lake, Alta., is shown at her medical clinic in Calgary on Friday, April 16, 2021. THE CANADIAN PRESS/Jeff McIntosh
10 years later: Former Slave Lake mayor remembers wildfire that burned through town

Alberta announced in 2011 that an unknown arsonist had recklessly or deliberately ignited the forest fire

The body of Brenda Ware, 35, was found along Highway 93 in Kootenay National Park on Thursday, May 6, 2021. (RCMP handout)
RCMP ask for tips after woman travelling from Alberta found dead in B.C. park

Brenda Ware was found along Highway 93 in the park, 54 kilometres north of the town of Radium

A caribou grazes on Baffin Island in a 2008 file photo. A last-ditch attempt to save some of Canada’s vanishing caribou herds is a step closer after a scientific review panel’s approval of a plan to permanently pen some animals and breed them to repopulate other herds. THE CANADIAN PRESS/AP-Kike Calvo via AP Images
Parks Canada captive caribou breeding proposal gets OK from scientific review panel

Wolf density in Jasper is low enough that the animals would not be expected to be a major threat

People pass the red hearts on the COVID-19 Memorial Wall mourning those who have died, opposite the Houses of Parliament on the Embankment in London, Wednesday, April 7, 2021. On May 3, the British government announced that only one person had died of COVID-19 in the previous 24 hours. THE CANADIAN PRESS/AP-Kirsty Wigglesworth
For a view of a COVID-19 future, Canadians should look across the pond

Britain, like Canada, is one of the only countries in the world to delay second doses for several months

Nuns of Mother Teresa’s Missionaries of Charity, carry some of her relics during a vigil of prayer in preparation for the canonization of Mother Teresa in the St. John in Latheran Basilica at the Vatican, Friday, Sept. 2, 2016. In which city did she do much of her charitable work? (AP Photo/Gregorio Borgia)
QUIZ: How much do you know about these motherhood issues?

In honour of Mother’s Day, take this 10-question quiz

Canada’s chief public health officer is reminding Canadians even those who are fully vaccinated are not immune from transmitting the COVID-19. THE CANADIAN PRESS/Adrian Wyld
Canada’s top doctor warns full vaccination does not equal full protection from COVID-19

Post-inoculation, Theresa Tam says the risk of asymptomatic infection and transmission is far lower but not obsolete

Jennifer Coffman, owner of Truffle Pigs in Field, B.C., poses beside her business sign on Thursday, May 6, 2021, in this handout photo. Her restaurant and lodge have been hit hard by a closure of a section of the Trans-Canada Highway and by the British Columbia government discouraging Alberta residents from visiting during the pandemic. THE CANADIAN PRESS/HO-Jennifer Coffman, *MANDATORY CREDIT*
‘Why we survive’: B.C. boundary towns struggle without Albertans during pandemic

Jennifer Coffman’s restaurant is located in the tiny community of Field, which relies on tourism

A rodeo south of Bowden drew a huge crowd on May 1 and 2, 2021. (Photo courtesy Mom’s Diner’s Facebook page)

Most Read