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Varcoe: 'We are at an inflection point as a community' as takeover of Shaw hits corporate Calgary – Calgary Herald



The $26-billion acquisition of Shaw by Rogers puts an exclamation point on the rapid pace of change that’s now unfolding.

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Sometimes it takes decades for the business landscape to evolve.

Today, it feels like the corporate terrain in Calgary and across Alberta is transforming under our feet — and the community will look vastly different coming out of the pandemic than it did 12 months ago.

The $26-billion acquisition Monday of Shaw Communications Inc. by Toronto-based Rogers Communications Inc. puts an exclamation point on the rapid pace of change that’s now unfolding.

An iconic name in Alberta’s business community is being acquired as two Canadian telecom giants join forces.

“We are in a new environment,” says Martin Pelletier, a portfolio manager at Wellington-Altus Private Counsel in Calgary.

“When you have these big events, it has a profound impact on the landscape and there’s a changing out of the leaders and a whole new guard comes in.”

The friendly transaction, which needs shareholder approval, will see Rogers offer $40.50 a share for Shaw stock in a deal worth $20.4 billion and the assumption of $5.8 billion of Shaw’s debt.


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While leaders across Alberta have preached about the merits of economic diversification for decades, Shaw was the embodiment of it happening in the province over the past 50 years.

Founded by JR Shaw, he created Capital Cable Television Co. and signed up his first customer in Sherwood Park in 1971. He began assembling a business empire, changing its name to Shaw Cablesystems in 1983.

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JR Shaw, founder of Shaw, in 2002.
JR Shaw, founder of Shaw, in 2002. Photo by Greg Fulmes/Postmedia

The head office moved to Calgary in 1995 and Shaw Communications eventually expanded into a number of areas, becoming a satellite TV and Internet provider and in 2016, it made a key move into wireless by buying Wind Mobile. (JR Shaw died last year. His son, Brad, has been CEO since 2010.)

The company has 9,500 employees across Canada, including 3,250 in Alberta.

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Brad Shaw, who will join the board of Rogers, pointed out the combined companies will be able to make major investments in 5G networks more quickly and grow the business.

“Western Canada is a big part of their thinking, a big part of their plans,” he said in an interview.

Rogers CEO Joe Natale said the company is making a number of commitments to expand the business in the city and province.

It will create a regional headquarters for its Western Canadian operations at Shaw’s existing downtown offices.

It will spend $2.5 billion building 5G networks in Western Canada in the next five years, and establish a new $1 billion fund to support rural, remote and Indigenous communities being connected to high-speed Internet.


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In Calgary, Rogers will establish a National Centre of Technology and Engineering Excellence, with 500 new jobs in the city that could serve as a platform for even greater growth.

These jobs will include positions related to telecom, software and systems engineers, IT and cybersecurity roles, as well as artificial intelligence research.

“There’s a great diversification here within Calgary, which I think is needed,” added Brad Shaw. “It was really important for our family to make sure that those commitments were there.”

In total, the new network investments and technology positions will create up to 3,000 net new jobs in Western Canada, including 1,800 in Alberta.

“As we look to the future, we want to grow and invest in the West. We know Alberta’s economy is facing some of the most challenging periods ever…It’s not lost on us,” Natale said in an interview.

“Our goal is to have this partnership be about growing the jobs and addressing these challenges.”

Rogers Communications CEO Joe Natale in 2018.
Rogers Communications CEO Joe Natale in 2018. Photo by Nathan Denette/The Canadian Press

Shaw has more than 2,600 employees in Calgary.

Rogers said it expects the acquisition will unlock cost-savings of more than $1 billion annually within two years of the deal closing.

Cost-cutting will inevitably give rise to concerns about corporate job losses, but Rogers’ CEO stressed the deal will lead to more jobs coming to the city.

“It is going to feel, look, walk and talk like a head office because decisions will be made there by senior people,” he added.

The promise to put additional resources and jobs into Western Canada provided comfort to local leaders.


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(The broader question of what it means for consumers, particularly wireless customers, is a matter that will be examined by regulators and the Competition Bureau.)

For Calgary, the Shaw acquisition comes at a time when the city is witnessing economic upheaval and ongoing challenges from COVID-19 and a tough recession.

Oil and gas companies such as Husky Energy and Seven Generations Energy have been taken over recently during a flurry of oilpatch M&A deals. Tourism and travel companies face an uncertain future with the pandemic, while the tech sector is expanding.

“All of these things point to we are at an inflection point as a community, as sectors, as industries — and rapid change will be the new norm,” said Mary Moran, CEO of Calgary Economic Development.

Alberta business leader Dick Haskayne, whose memoir Northern Tigers talked about the importance of building Canadian corporate champions, said it’s hard to overestimate the importance of having head offices in the community.

“It is absolutely critical because that’s where the important decisions are made,” he said.

However, Canada must also create companies that can compete globally, Haskayne said.

Monday’s deal left local leaders with mixed feelings.

Mayor Naheed Nenshi welcomed the additional investment coming into the city. But he’s also eyeing the loss of one of Calgary’s largest corporate head offices while trying to attract other headquarters to fill up vacant downtown office towers.


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“Ultimately our goal has to be jobs and the take-up of space in the downtown core,” he said.

Premier Jason Kenney told reporters he’d rather see the merged head office be based in Calgary, but noted Rogers has pledged to boost its employment in Alberta.

He expects regulators and the Competition Bureau to carefully review the merger and the province will likely make submissions on the transaction. It will likely take nine to 12 months before the regulatory review is done.

As the examination unfolds, what is clear is a marquee Alberta company has been purchased — and while more jobs will be coming, Monday’s deal is another sign of a community, a province and an industry facing a major economic transition.

Chris Varcoe is a Calgary Herald columnist.


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CANADA STOCKS – TSX falls 0.14% to 19,201.28



* The Toronto Stock Exchange’s TSX falls 0.14 percent to 19,201.28

* Leading the index were Stantec Inc <STN.TO​>, up 3.4%, Imperial Oil Ltd​, up 3.3%, and Corus Entertainment Inc​, higher by 2.9%.

* Lagging shares were Aphria Inc​​, down 14.2%, Village Farms International Inc​, down 9.9%, and Aurora Cannabis Inc​, lower by 9.4%.

* On the TSX 91 issues rose and 134 fell as a 0.7-to-1 ratio favored decliners. There were 24 new highs and no new lows, with total volume of 228.0 million shares.

* The most heavily traded shares by volume were Toronto-dominion Bank, Royal Bank Of Canada and Suncor Energy Inc.

* The TSX’s energy group fell 0.32 points, or 0.3%, while the financials sector climbed 2.46 points, or 0.7%.

* West Texas Intermediate crude futures rose 0.52%, or $0.31, to $59.63 a barrel. Brent crude  rose 0.4%, or $0.25, to $63.2 [O/R]

* The TSX is up 10.1% for the year.

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Air Canada signs C$5.9 billion government aid package, agrees to buy Airbus, Boeing jets



By David Ljunggren and Allison Lampert

OTTAWA/MONTREAL (Reuters) -Air Canada, struggling with a collapse in traffic due to the COVID-19 pandemic, reached a deal on Monday on a long-awaited aid package with the federal government that would allow it to access up to C$5.9 billion ($4.69 billion) in funds.

The agreement – the largest individual coronavirus-related loan that Ottawa has arranged with a company – was announced after the airline industry criticized Prime Minister Justin Trudeau’s Liberal government for dawdling. The United States and France acted much more quickly to help major carriers.

Canada‘s largest carrier, which last year cut over half its workforce, or 20,000 jobs, and other airlines have been negotiating with the government for months on a coronavirus aid package.

In February, Air Canada reported a net loss for 2020 of C$4.65 billion, compared with a 2019 profit of C$1.48 billion.

As part of the deal, Air Canada agreed to ban share buybacks and dividends, cap annual compensation for senior executives at C$1 million a year and preserve jobs at the current level, which is 14,859.

It will also proceed with planned purchases of 33 Airbus SE 220 airliners and 40 Boeing Co 737 MAX airliners.

Chris Murray, managing director, equity research at ATB Capital Markets, said the deal took into account the “specific needs of Air Canada in the short and medium term without being overly onerous.”

He added: “It gives them some flexibility in drawing down additional liquidity as needed.”

Transport Minister Omar Alghabra said the government was still in negotiations with other airlines about possible aid.

Canada, the world’s second-largest nation by area, depends heavily on civil aviation to keep remote communities connected.

Opposition politicians fretted that further delays in announcing aid could result in permanent damage to the country.

Air Canada said it would resume services on nearly all of the routes it had suspended because of COVID-19.


The deal removes a potential political challenge for the Liberals, who insiders say are set to trigger an election later this year.

The government has agreed to buy C$500 million worth of shares in the airline, at C$23.1793 each, or a 14.2% discount to Monday’s close, a roughly 6% stake.

“Maintaining a competitive airline sector and good jobs is crucially important,” Finance Minister Chrystia Freeland told reporters, adding the equity stake would allow taxpayers to benefit when the airline’s fortunes recovered.

The Canadian government previously approved similar loans for four other companies worth up to C$1.billion, including up to C$375 million to low-cost airline Sunwing Vacations Inc. The government has paid out C$73.47 billion under its wage subsidy program and C$46.11 billion in loans to hard-hit small businesses.

Michael Rousseau, Air Canada‘s president and chief executive officer, said the liquidity “provides a significant layer of insurance for Air Canada.”

Jerry Dias, head of the Unifor private-sector union, described the announcement as “a good deal for everybody.”

Unifor represents more than 16,000 members working in the air transportation sector.

But the Canadian Union of Public Employees, which represents roughly 10,000 Air Canada flight attendants, said the package protected the jobs of current workers rather than the 7,500 members of its union who had been let go by the carrier.

($1=1.2567 Canadian dollars)

(Reporting by David Ljunggren in Ottawa and Allison Lampert in Montreal; Additional reporting by Julie Gordon in Ottawa and Munsif Vengattil in Bengaluru; Editing by Dan Grebler and Peter Cooney)

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U.K. advises limiting AstraZeneca in under-30s amid clot worry



British authorities recommended Wednesday that the AstraZeneca COVID-19 vaccine not be given to adults under 30 where possible because of strengthening evidence that the shot may be linked to rare blood clots.

The recommendation came as regulators both in the United Kingdom and the European Union emphasized that the benefits of receiving the vaccine continue to outweigh the risks for most people — even though the European Medicines Agency said it had found a “possible link” between the shot and the rare clots. British authorities recommended that people under 30 be offered alternatives to AstraZeneca. But the EMA advised no such age restrictions, leaving it up to its member-countries to decide whether to limit its use.

Several countries have already imposed limits on who can receive the vaccine, and any restrictions are closely watched since the vaccine, which is cheaper and easier to store than many others, is critical to global immunization campaigns and is a pillar of the UN-backed program known as COVAX that aims to get vaccines to some of the world’s poorest countries.

“This is a course correction, there’s no question about that,” Jonathan Van-Tam, England’s deputy chief medical officer, said during a press briefing. “But it is, in a sense, in medicine quite normal for physicians to alter their preferences for how patients are treated over time.”

Van-Tam said the effect on Britain’s vaccination timetable — one of the speediest in the world — should be “zero or negligible,” assuming the National Health Service receives expected deliveries of other vaccines, including those produced by Pfizer and Moderna.

EU and U.K. regulators held simultaneous press conferences Wednesday afternoon to announce the results of investigations into reports of blood clots that sparked concern about the rollout of the AstraZeneca vaccine.

The EU agency described the clots as “very rare” side effects. Dr Sabine Straus, chair of EMA’s Safety Committee, said the best data is coming from Germany where there is one report of the rare clots for every 100,000 doses given, although she noted far fewer reports in the U.K. Still, that’s less than the clot risk that healthy women face from birth control pills, noted another expert, Dr. Peter Arlett.

The agency said most of the cases reported have occurred in women under 60 within two weeks of vaccination — but based on the currently available evidence, it was not able to identify specific risk factors. Experts reviewed several dozen cases that came mainly from Europe and the U.K., where around 25 million people have received the AstraZeneca vaccine.

“The reported cases of unusual blood clotting following vaccination with the AstraZeneca vaccine should be listed as possible side effects of the vaccine,” said Emer Cooke, the agency’s executive director. “The risk of mortality from COVID is much greater than the risk of mortality from these side effects.”

Arlett said there is no information suggesting an increased risk from the other major COVID-19 vaccines.

The EMA’s investigation focused on unusual types of blood clots that are occurring along with low blood platelets. One rare clot type appears in multiple blood vessels and the other in veins that drain blood from the brain.

While the benefits of the vaccine still outweigh the risks, that assessment is “more finely balanced” among younger people who are less likely to become seriously ill with COVID-19, the U.K’s Van-Tam said.

“We are not advising a stop to any vaccination for any individual in any age group,” said Wei Shen Lim, who chairs Britain’s Joint Committee on Vaccination and Immunization. “We are advising a preference for one vaccine over another vaccine for a particular age group, really out of the utmost caution rather than because we have any serious safety concerns.”

In March, more than a dozen countries, mostly in Europe, suspended their use of AstraZeneca over the blood clot issue. Most restarted — some with age restrictions — after the EMA said countries should continue using the potentially life-saving vaccine.

Britain, which relies heavily on AstraZeneca, however, continued to use it.

The suspensions were seen as particularly damaging for AstraZeneca because they came after repeated missteps in how the company reported data on the vaccine’s effectiveness and concerns over how well its shot worked in older people. That has led to frequently changing advice in some countries on who can take the vaccine, raising worries that AstraZeneca’s credibility could be permanently damaged, spurring more vaccine hesitancy and prolonging the pandemic.

Dr. Peter English, who formerly chaired the British Medical Association’s Public Health Medicine Committee, said the back-and-forth over the AstraZeneca vaccine globally could have serious consequences.

“We can’t afford not to use this vaccine if we are going to end the pandemic,” he said.

In some countries, authorities have already noted hesitance toward the AstraZeneca shot.

“People come and they are reluctant to take the AstraZeneca vaccine, they ask us if we also use anything else,” said Florentina Nastase, a doctor and co-ordinator at a vaccination centre in Bucharest, Romania. “There were cases in which people (scheduled for the AstraZeneca) didn’t show up, there were cases when people came to the centre and saw that we use only AstraZeneca and refused (to be inoculated).”

Meanwhile, the governor of Italy’s northern Veneto region had said earlier Wednesday that any decision to change the guidance on AstraZeneca would cause major disruptions to immunizations — at a time when Europe is already struggling to ramp them up — and could create more confusion about the shot.

“If they do like Germany, and allow Astra Zeneca only to people over 65, that would be absurd. Before it was only for people under 55. Put yourself in the place of citizens, it is hard to understand anything,” Luca Zaia told reporters.

The latest suspension of AstraZeneca came in Spain’s Castilla y Leon region, where health chief Veronica Casado said Wednesday that “the principle of prudence” drove her to put a temporary hold on the vaccine that she still backed as being both effective and necessary.

French health authorities had said they, too, were awaiting EMA’s conclusions, as were some officials in Asia.

On Wednesday, South Korea said it would temporarily suspend the use of AstraZeneca’s vaccine in people 60 and younger. In that age group, the country is only currently vaccinating health workers and people in long-term care settings.

The Korea Disease Control and Prevention Agency said it would also pause a vaccine rollout to school nurses and teachers that was to begin on Thursday, while awaiting the outcome of the EMA’s review.

But some experts urged perspective. Prof Anthony Harnden, the deputy chair of Britain’s vaccination committee, said that the program has saved at least 6,000 lives in the first three months and will help pave the way back to normal life.

“What is clear it that for the vast majority of people the benefits of the Oxford AZ vaccine far outweigh any extremely small risk,” he said. “And the Oxford AZ vaccine will continue to save many from suffering the devastating effects that can result from a COVID infection.”

Source: – CTV News

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