Rogers deal to purchase Shaw would create second-biggest telecom in Canada.
Deal, valued at $26 billion including debt, will need approval from Canadian regulators.
Shaw, currently Canada’s fourth-biggest telecom, owns Freedom Mobile and Shaw Mobile in Alberta, B.C. and Ontario.
Transaction includes 3,000 net new jobs, proposed regional headquarters in Calgary.
Unknown impact on existing jobs, customers.
Are you a Shaw or Rogers customer? What do you think about the deal? Let us know in the comments or send your thoughts to Ask@cbc.ca.
Rogers Communications has signed a deal to buy Shaw Communications in a transaction valued at $26 billion, including debt, which would create Canada’s No. 2 cellular and cable operator — but is likely to face stiff regulatory scrutiny.
Under the plan, Rogers will pay $40.50 in cash for each of Shaw’s issued and outstanding class A and class B shares. Shaw shares jumped 42 per cent to $34 on Monday, but traded well below the offer price of $40.50, suggesting doubts about the deal. Shares of Rogers were also up seven per cent at $64.
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.
By acquiring fourth-ranked Shaw, Rogers would leap past current No. 2 Telus to take on market leader BCE Inc., the publicly traded holding company for the Bell Canada group of companies. It would also be the biggest deal in Canadian telecoms history since BCE completed the spinoff of its stake in Nortel Networks in a transaction valued at $88.7 billion in 2000, according to Refinitiv data.
“It was always talked about that Rogers and Shaw would eventually get together. And for 30 years I’ve heard about it,” Patrick Horan, a portfolio manager at Agilith Capital, told CBC’s Meegan Read on Monday. “But today’s the day it actually happened.”
The announcement also helped lift Canada’s main stock index in late-morning trading. The telecom sector led the way higher as the S&P/TSX composite index was up 19.76 points at 18,871.08.
WATCH | Industry expert reacts to Rogers-Shaw deal:
Patrick Horan, a portfolio manager with Toronto-based investment service Agilith Capital, says he’s been hearing about a potential deal between Rogers Communications and Shaw Communications for decades, but he was shocked when the news actually broke today. 0:27
Deal subject to shareholder approval, regulatory review
The deal, which requires shareholder approval, is subject to other customary closing conditions, as well as approvals from Canadian regulators. It is expected to close in the first half of 2022.
The deal will face review by the independent Competition Bureau of Canada, the Canadian Radio-television and Telecommunications Commission (CRTC), as well as the federal department of Innovation, Science, and Economic Development (ISED).
Canadian Innovation Minister François-Philippe Champagne said in a statement that the review would focus on “affordability, competition, and innovation.”
Shaw executive chair and CEO Brad Shaw and another director to be nominated by the Shaw family will be named to the Rogers board as part of the deal. (Jeff McIntosh/The Canadian Press)
“Shaw was always seen as a solid fourth player in Canada. When you’re talking about taking out that fourth player, I do see that there are some regulatory risks for this,” said Stephen Duench, portfolio manager at AGF Investments, whose firm owns shares in both companies.
Rogers chief executive Joe Natale told analysts in a Monday 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.
Horan foresees approval challenges on the wireless side, but he does expect the deal to go through. “The question is, how do they treat wireless, Shaw wireless in particular. And that’s sort of a trickier thing,” he said.
“I have to believe that Rogers has something in their back pocket to say: ‘We can carve out sort of special interests or regional interests for Shaw wireless and float them.’ “
Complaints of high cellphone bills during last election
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.
WATCH | A look at the Rogers-Shaw deal:
Rogers Communications has signed a deal to buy Shaw Communications in a transaction valued at $26 billion, including debt. The deal is expected to close in the first half of 2022, pending regulatory and shareholder approval. 2:44
Canada’s telecoms industry came under the spotlight during the last federal election, with voters complaining about cellphone bills, which are among the highest in the world.
In March last year, Prime Minister Justin Trudeau’s minority Liberal government ordered Canada’s top three telecom operators, which together control 89.2 per cent of the market, to cut prices on their mid-range wireless service plans by 25 per cent within two years or face regulatory action.
Sticking with its pledge of offering affordable wireless plans, Rogers said it would not raise wireless prices for Freedom Mobile customers for at least three years after the closure of the deal.
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 the company was not looking to sell cable firm Cogeco, in which it owns a 34 per cent stake, or any other assets.
Shaw CEO confident in long-term benefits
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 executive chair and CEO Brad Shaw said in a statement.
The combined company — which will create up to 3,000 net new jobs — will have a Western regional headquarters at Shaw Court in downtown 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 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.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
