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.
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
