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Rogers' $26B plan to buy Calgary-based Shaw would create Canada's 2nd-biggest telecom – CBC.ca

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The latest:

  • 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.

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Two dead in Tesla crash in Texas that was believed to be driverless

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(Reuters) -Two men died after a Tesla vehicle, which was believed to be operating without anyone in the driver’s seat, crashed into a tree on Saturday night north of Houston, authorities said.

“There was no one in the driver’s seat,” Sgt. Cinthya Umanzor of the Harris County Constable Precinct 4 said.

The 2019 Tesla Model S was traveling at a high rate of speed, when it failed to negotiate a curve and went off the roadway, crashing to a tree and bursting into flames, local television station KHOU-TV said.

After the fire was extinguished, authorities located 2 occupants in the vehicle, with one in the front passenger seat while the other was in the back seat of the Tesla, the report said, citing Harris County Precinct 4 Constable Mark Herman.

Tesla and the National Highway Traffic Safety Administration did not immediately respond to a request for comment.

The accident comes amid growing scrutiny over Tesla’s semi-automated driving system following recent accidents and as it is preparing to launch its updated “full self-driving” software to more customers.

The U.S. auto safety agency said in March it has opened 27 investigations into crashes of Tesla vehicles; at least three of the crashes occurred recently.

Tesla CEO Elon Musk said in January that he expects huge profits from its full self-driving software, saying he is “highly confident the car will be able to drive itself with reliability in excess of human this year.”

The self-driving technology must overcome safety and regulatory hurdles to achieve commercial success.

Umanzor said the two crash victims were born in 1962 and 1951.

(Reporting by Hyunjoo Jin in Berkeley, California and Kanishka Singh in Bengaluru; Additional reporting by David Shephardson in Washington)

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Livid Russia expels 20 Czechs after blast blamed on Skripal suspects

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By Gabrielle Tétrault-Farber and Robert Muller

MOSCOW/PRAGUE (Reuters) -Moscow expelled 20 Czech diplomats on Sunday in a confrontation over Czech allegations that two Russian spies accused of a nerve agent poisoning in Britain in 2018 were behind an earlier explosion at a Czech ammunition depot that killed two people.

Prague had on Saturday ordered out 18 Russian diplomats, prompting Russia to vow on Sunday to “force the authors of this provocation to fully understand their responsibility for destroying the foundation of normal ties between our countries”.

Moscow gave the Czech diplomats just a day to leave, while Prague had given the Russians 72 hours.

The Czech Republic said it had informed NATO and European Union allies that it suspected Russia of causing the 2014 blast, and European Union foreign ministers were set to discuss the matter at their meeting on Monday.

The U.S. State Department commended Prague’s firm response to “Russia’s subversive actions on Czech soil”.

The row is the biggest between Prague and Moscow since the end of decades of Soviet domination of eastern Europe in 1989.

It also adds to growing tensions between Russia and the West in general, raised in part by Russia’s military build-up on its Western borders and in Crimea, which Moscow annexed from Ukraine in 2014, after a surge in fighting between government and pro-Russian forces in Ukraine’s east.

Russia said Prague’s accusations were absurd as it had previously blamed the blast at Vrbetice, 300 km (210 miles) east of the capital, on the depot’s owners.

It called the expulsions “the continuation of a series of anti-Russian actions undertaken by the Czech Republic in recent years”, accusing Prague of “striving to please the United States against the backdrop of recent U.S. sanctions against Russia”.

ARMS SHIPMENT

Czech Prime Minister Andrej Babis said the attack had been aimed at a shipment to a Bulgarian arms trader.

“This was an attack on ammunition that had already been paid for and was being stored for a Bulgarian arms trader,” he said on Czech Television.

He said the arms trader, whom he did not name, had later been the target of an attempted murder.

Bulgarian prosecutors charged three Russian men in 2020 with an attempt to kill arms trader Emilian Gebrev, who was identified by Czech media as the same individual. Reuters was unable to reach Gebrev for comment.

Czech police said two men using the names Alexander Petrov and Ruslan Boshirov had travelled to the Czech Republic days before the arms depot blast.

Those names were the aliases used by the two Russian GRU military intelligence officers wanted by Britain for the poisoning of former Russian spy Sergei Skripal and his daughter with the Soviet-era nerve agent Novichok in the English city of Salisbury in 2018. The Skripals survived, but a member of the public died.

The Kremlin denied involvement in that incident, and the attackers remain at large.

Czech interior and acting foreign minister Jan Hamacek said police knew about the two people from the beginning, “but only found out when the Salisbury attack happened that they are members of the GRU, that Unit 29155”.

Hamacek said Prague would ask Moscow for assistance in questioning them, but did not expect it to cooperate.

“DANGEROUS AND MALIGN”

British Foreign Secretary Dominic Raab tweeted that the Czechs “have exposed the lengths that the GRU will go to in their attempts to conduct dangerous and malign operations”.

A NATO official said the alliance would support the Czech Republic as it investigated Russia’s “malign activities”, which were part of a pattern of “dangerous behaviour”.

“Those responsible must be brought to justice,” added the official, who declined to be named.

The United States imposed sanctions against Russia on Thursday for interfering in last year’s U.S. election, cyber hacking, bullying Ukraine and other actions, prompting Moscow to retaliate.

On Sunday, U.S. national security adviser Jake Sullivan said Washington had told Moscow “there will be consequences” if Alexei Navalny, the opposition figurehead who almost died last year after being given a toxin that Western experts say was Novichok, dies in prison, where he is on hunger strike.

The 2014 incident has resurfaced at an awkward time for Prague and Moscow.

The Czech Republic is planning to put the construction of a new nuclear power plant at its Dukovany complex out to tender.

Security services have demanded that Russia’s Rosatom be excluded as a security risk, while President Milos Zeman and other senior officials have been putting Russia’s case.

In a text message, Industry Minister Karel Havlicek, who was previously in favour of including Russia, told Reuters: “The probability that Rosatom will participate in the expansion of Dukovany is very low.”

(Additional reporting by Jan Lopatka in Prague, Philip Blenkinsop in Brussels, Elizabeth Piper in London, Andrew Osborn in Moscow and Phil Stewart in WashingtonEditing by Kevin Liffey, Mark Heinrich, Alexandra Hudson)

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Canada’s immigration initiative for Hong Kong residents receives over 500 applications early on

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hong kong

By Kanishka Singh

(Reuters) – Canadian Prime Minister Justin Trudeau’s special immigration initiative for Hong Kong residents received over 500 applications in its first three weeks, a spokesman for Canada‘s immigration ministry said on Friday.

In November, the Canadian government said it would make it easier for Hong Kong youth to study and work in Canada in response to new security rules imposed by China on the former British colony.

“In the first three weeks that the program was open (Feb. 8 to Feb. 28), IRCC (Immigration, Refugees and Citizenship Canada) received 503 applications for work permits and 10 applications for work permit extensions,” press secretary Alexander Cohen said in an emailed statement.

Canada shares the grave concerns of the international community over China’s National Security Legislation and strongly supports the right to peaceful protest, freedom of expression and freedom of assembly”, the statement added.

Canada said in February that Hong Kong graduates of Canadian universities could apply for a new category of three-year work permit from that month.

China imposed a new national security law in late June 2020 in Hong Kong, aimed at anything Beijing regards as subversion, secession or terrorism.

As China imposed the sweeping law, residents of the city moved tens of billions of dollars across the globe to Canada, where thousands were hoping to forge a new future.

Capital flows out of Hong Kong banks reaching Canada rose to their highest levels on record last year, with about C$43.6 billion ($34.87 billion) in electronic funds transfers (EFT) recorded by FINTRAC, Canada‘s anti-money-laundering agency, which receives reports on transfers above C$10,000.

The Hong Kong government has said the city has not seen significant capital outflows since the anti-government unrest first began in 2019.

Canada is a second home for many Hong Kong residents after their families moved to the Vancouver and Toronto areas ahead of the British handover of its former colony to China in 1997. After obtaining Canadian citizenship, many returned to Hong Kong, which is now home to about 300,000 Canadians – one of the largest Canadian communities abroad.

Canadian visa applications from Hong Kong, excluding visitors’ visas, rose 10% to 8,121 in 2020.

($1 = 1.2503 Canadian dollars)

 

(Reporting by Kanishka Singh in Bengaluru; Editing by Matthew Lewis)

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