Rogers Communications Inc. said Friday it will invest up to $3 billion in Quebec if the telecom giant is successful in acquiring rival Cogeco’s Canadian assets.
The Toronto-based company unveiled a series of measures aimed at sweetening a deal to buy Cogeco’s internet and cable television business after getting rebuffed by the company’s largest shareholder earlier this month.
Rogers and Altice USA Inc. delivered an unsolicited proposal to buy Cogeco, with the U.S. company offering $10.3 billion for the company and would then sell the Canadian assets to Rogers for a cash consideration of $3.4 billion.
“Rogers is deeply committed to the future of innovation and the knowledge economy in Quebec. We would be honoured to help enhance the customer experience and bring new investments including 5G that will fundamentally reshape the economic landscape of Quebec,” said Joe Natale, Rogers’ president and chief executive officer, in a statement.
Rogers said it would spend $3 billion in Quebec, where Cogeco is based, over the next five years. Half of that investment would be earmarked for various network investments including a broad rollout of 5G wireless technology infrastructure as well as expanding connectivity to rural communities. Rogers added it would ensure that the combined company would employ 5,000 people while keeping Cogeco’s headquarters and management in the province, and would support several community partnerships.
A Cogeco spokesperson told BNN Bloomberg in an email that Rogers is free to make its investment in Quebec, but it doesn’t need to buy Cogeco to do so.
“If Rogers fails to invest, their competitors will take away its mobile customers, regardless of 5G,” the spokesperson said. “As far as Cogeco is concerned, the company remains focused on executing its profitable growth strategy, investing in its state of the art broadband networks and offering leading edge services to its customers.”
Earlier this month, Cogeco’s independent directors rejected Rogers and Altice’s takeover offer, with Gestion Audem, Cogeco’s controlling shareholder and the Audet family’s investment vehicle, stating that it is not interested in selling its shares.
Analysts have also cast doubt on whether a deal could ever materialize given the Audet family’s control of the business.
Foreign Investment Plummets During Pandemic, Except in China – The Wall Street Journal
Foreign direct investment in China largely held steady during the first half of this year, even as investment inflows into the U.S. and European Union plummeted, in a fresh sign that the world’s second-largest economy has suffered less damage from the pandemic.
Globally, the monthly average for new investments for the first half of the year was down almost half on the monthly average for the whole of 2019, the largest decline on record, the United Nations’s Conference on Trade and Development said Tuesday. But while foreign investment in the U.S. and European Union fell by 61% and 29% respectively, inflows to China were down by just 4%. China attracted foreign investment totaling $76 billion during the period, while the U.S. attracted $51 billion.
The U.S. has long been the top global destination for businesses investing overseas, while China has long ranked second.
Unctad said the modest nature of the decline in foreign investment to China was surprising. Back in March, when China was the epicenter of the pandemic with significant parts of its economy in lockdown, Unctad forecast that it would be the big loser, and expected global flows of investment to fall by 15% across 2020.
However, China’s economy reopened in April just as the U.S. and Europe were in lockdown, and the country has since contained the virus with only localized and short-lived restrictions. By contrast, the U.S. and Europe have seen resurgences in infections that have slowed their recoveries. In the three months through September, China’s economy had already exceeded the levels of output recorded in the last quarter of 2019, according to data out last week.
The resilience of foreign investment in China appears to confound earlier expectations that businesses would seek to reduce their reliance on the country as a key part of their supply chains. But James Zhan, Unctad’s director of investment and enterprise, said it was too early to reach that conclusion.
“One of the main reasons for reconfiguration of global supply chains is to increase resilience, which requires backup plans and redundant capacities,” he said. “A more practical approach companies can take would be building additional production bases outside of China, which means new investment to other countries instead of divestment from China or moving production out of China.”
Across all developed economies, inflows of foreign investment were down 75% in the first half from the 2019 monthly average to total just $98 billion, a level last seen in 1994. In some cases—such as the Netherlands and the U.K.—that decline took the form of a reduction in loans from the parent company to its overseas subsidiaries, which are counted as foreign investment.
With tensions running high, Washington and Beijing have pushed to decouple technology and trade. But American financial firms including JPMorgan and Goldman Sachs are doubling down on investing in China and expanding headcount. Photo Composite: Crystal Tai[object Object]
“In times of crisis, some multinational enterprises would like to keep funds close to home,” said Mr. Zhan. “Fear that Covid-19 and the quest for funds could lead to tax increase may also accelerate the intra-firm capital movements.”
Foreign investment in developing economies proved more resilient, falling by just 16% to $296 billion.
Unctad said there were signs of a pickup in investment during the three months through September, and it repeated its forecast that flows for 2020 as a whole would likely be 40% down on 2019. But it warned that the second wave of rising infections hitting a number of developed economies could see flows down 50% for the year.
While foreign investment in most countries fell during the first six months, a small number saw an increase. One was Germany, which saw inflows rise 15% to $21 billion, largely due to a small number of foreign acquisitions of existing businesses.
Write to Paul Hannon at email@example.com
Green Power to Draw $11 Trillion Investment by 2050, BNEF Says – BNN
Green power is set to draw around $11 trillion of investment in the coming decades as the cost of renewables plummets and more of the world’s energy comes from electricity.
That’s the latest analysis from BloombergNEF in its annual New Energy Outlook report. It’s further evidence of how cheap renewable power sources will continue to push aside fossil fuels in the energy mix.
Despite the massive sum, BNEF said the pace of building out new renewables will need to increase further to limit global warming to less than 2 degrees Celsius by the end of the century.
The projected increases in renewable energy and battery technology — wind and solar will grow to 56% of global electricity in 2050 — are set to cause emissions to peak in 2027 and then fall 0.7% annually until 2050, BNEF said.
That would lead to a warming of 3.3 degrees Celsius by 2100, well short of the 6% annual emissions reduction needed to keep warming below 2 degrees and the 10% reduction required to achieve 1.5 degrees of warming.
Below are four key takeaways from this year’s report:
The only fossil fuel to increase its share of demand over the coming years will be gas. That’s largely driven by its use in heavy industry and to heat buildings. A key reason for the growth of gas to warm buildings is the weak economic argument for using heat pumps. BNEF doesn’t see cost parity with gas boilers until 2040. In the U.S., an abundance of cheap gas will delay the energy transition, but renewable power will still overtake the fuel by 2041.
The future of oil demand will be shaped by the uptake of electric vehicles. BNEF sees primary oil consumption peaking in 2035 and then gradually declining.
Meanwhile, the thirst for oil in road transport tops out in 2031, according to BNEF. The fall will be sped up by EVs reaching price parity with traditional engines before 2025, at which point people will start buying plug-in cars at a faster rate, offsetting oil’s growth from aviation, shipping and petrochemicals
. By 2050, some 65% of all passenger-vehicle kilometers will be made in electric vehicles. The current fleet of EVs is displacing 1 million barrels of oil a day.
Governments, energy companies and lobbyists have been touting hydrogen as a way to decarbonize vast swathes of the world’s economy.
If that is realized with hydrogen made by machines powered by renewable energy, the world will need a lot more of it. For so-called green hydrogen to provide just under a quarter of energy in 2050, it would require 38% more power than is currently produced globally. Making all that hydrogen with wind and solar farms would require a land area the size of India.
Air travel will continue to be one of the most difficult sectors to decarbonize. Aviation emissions are up 80% since 1990 and they’ll double again by 2050. It’s one of the few sectors, along with shipping, that struggles to electrify. Heavy planes and ships that need to travel long distances would require batteries to significantly improve in order to make them commercially viable for the sector. Sustainable fuel alternatives and ammonia would need more government support than currently expected to make them cost competitive with fossil fuels in the coming decades.
©2020 Bloomberg L.P.
Global foreign direct investment halved amid pandemic, but China remained resilient – UN News
FDI includes cross-border mergers and acquisitions, international project finance, and corporate investments in new “greenfield” projects abroad, and it can be an indicator of the growth of the corporate supply chains that play an important role in world trade.
Worse than expected
“This was due to the lockdowns around the world, which slowed existing investment projects, and the prospects for deeper recession which led the multinationals to reassess new projects. And that’s the current mood of the investors – they try to be very conservative at this stage”, he said at a press conference in Geneva.
All major forms of FDI and all regions suffered from the slowdown, although developed economies were worst hit, with FDI flows of $98 billion in the six months – a 75 per cent reduction from a year previously.
China holds course
However, China was bucking the trend, with FDI flows relatively stable at $76 billion in the first half of the year, while Hong Kong bounced back as an FDI destination after a weak 2019.
“Overall investment flows into China remain at a high level and this is partly because China was one of the very few countries, among the first, to control the pandemic and to resume its production system in the country.
“In the meantime the Chinese government put in place effective measures to retain investment, to service operations of the multinationals operating in the country, and also put in place new measures to attract investment”, Mr. Zhan said.
Most of the FDI heading to China went into high-tech industries. The value of Mergers and Acquisitions transactions into China, grew by 84 per cent, mostly in information services and e-commerce industries, while several multinational companies also expanded their investments into China, he added.
Global outlook highly uncertain
The global outlook remains highly uncertain, with question marks over the duration of the pandemic and the effectiveness of the policy response, but prospects for the full year remain in line with UNCTAD’s earlier projection of a 30-40 per cent decline, Mr. Zhan said.
The rate of decline in developing economies is expected to flatten because of the signs of impending recovery in East Asia, but the global decline is expected to continue, with a further reduction of 5-10 per cent foreseen in 2021, the UNCTAD official added.
FDI is the most important source of external funding for developing economies – outstripping remittances, bank loans and overseas development assistance.
The current value of FDI invested in projects around the world is equivalent to 42 per cent of annual global GDP, said Mr. Zhan.
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