It’s the biggest deal in Canada’s telecommunications sector in two decades.
Rogers Communications said on Monday it wants to buy Shaw Communications for $26 billion, creating Canada’s second-largest cellular and cable operator.
Consumer watchdogs say the deal will further constrain competition in a country with some of the world’s highest cellphone and internet costs.
The companies say the deal will help them invest in 5G networks and create “synergies.”
Here is what we know so far and what the proposed tie-up might mean for you.
How will this deal impact consumers?
Put simply, it’s not immediately clear.
Consumer advocates say Canada is “dramatically” different from other countries based on the number of cellphone providers here.
“We know that the less providers you have, the higher the prices get,” Laura Tribe, executive director of OpenMedia, an advocacy group, told CBC News.
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
“Over the years, we’ve seen competitor after competitor swallowed up by the Big 3,” Tribe said of Rogers, Bell and Telus.
“The result is always the same: more profits for the Big 3, worse plans and less choice for Canadians.”
Bell’s cellular brands include Virgin Mobile and Lucky Mobile, while Telus’s brands include Koodo and Public Mobile.
Rogers owns a national wireless network that operates under the Rogers, Fido and Chatr brands. Shaw owns Freedom Mobile and Shaw Mobile in Alberta, British Columbia and Ontario.
Tribe couldn’t give a specific estimate on how the deal will impact internet prices for Canadians.
As part of the deal, Rogers said it will will not increase wireless prices for Freedom Mobile customers for at least three years following the close of the transaction.
“The combined company is committed to continue offering affordable wireless plans, with no overage fees, that meet the budgets and needs of Canadians,” Shaw said in a statement.
How does deal impact Canadians in rural areas?
About 10 per cent of homes in Canada have no internet access, and roughly 600,000 households in Western Canada still cannot access the minimum internet speeds recommended by the federal government, Shaw said.
Rogers said it will commit to establishing a new $1 billion fund dedicated to connecting rural, remote and Indigenous communities across Western Canada to high-speed internet and closing critical connectivity gaps faster for underserved areas.
The company didn’t say when those initiatives will be launched, when more rural Canadians will be connected to high-speed internet or how much those connections will cost.
Outside the Toronto head office of Rogers Communications on Monday. Rogers has signed a deal to buy Shaw Communications in a transaction valued at $26 billion, including debt, which would create Canada’s second-largest cellular and cable operator. (Evan Mitsui/CBC News)
Is this deal actually bad for competition?
Shaw and Rogers aren’t direct competitors in cable and internet because their networks are in different parts of the country. They have, however, been fierce combatants in the wireless sector since Shaw bought the former Wind Mobile in 2016.
Fewer cellphone companies, Tribe said, invariably means less competition.
Rogers president and CEO Joe Natale told analysts in a morning conference call that it’s too early to speculate on whether the competitors will be required to divest any of their operations before approval for the deal is granted by federal regulators.
Is approval from regulator a foregone conclusion?
The Competition Bureau is looking into the proposed deal, Pierre Poilievre, the Conservative Party’s critic for jobs and industry, said in a statement. He said his party is pleased the Competition Bureau is looking into the proposed deal.
Poilievre said his party will also be reviewing the deal with an eye to ensuring it helps to create competition, jobs and affordability.
Innovation, Science and Industry Minister François-Philippe Champagne said in a brief statement that he wouldn’t predict the outcome of the regulatory reviews and repeated the Liberal government’s promises of greater affordability, competition and innovation in the Canadian telecom sector.
Natale said that Rogers feels “confident” the deal will be approved.
WATCH | Rogers plan to buy Shaw for $26B sparks concern:
Rogers Communications has signed a deal to buy Shaw Communications for $26 billion pending approval from the Competition Bureau of Canada, the CRTC and the Canadian government. The deal has raised fears that reduced competition will push Canadians’ cellphone bills even higher. 1:49
Why is this merger happening now?
The companies say it’s about building 5G networks. As part of the tie-up, Rogers will invest $6.5 billion in Western Canada to build critically needed 5G networks, Shaw said in a statement.
“We’re at a critical inflection point where generational investments are needed to make Canada-wide 5G a reality,” Natale said in a press release.
“5G is about nation-building; it’s vital to boosting productivity and will help close the connectivity gap faster in rural, remote and Indigenous communities.”
Rogers said it will commit to setting up a new $1 billion fund dedicated to connecting rural, remote and Indigenous communities across Western Canada to high-speed internet and closing critical connectivity gaps faster for underserved areas. (Evan Mitusi/CBC News)
How does the deal affect jobs?
New technology and network investments will create up to 3,000 net new jobs across Alberta, British Columbia, Manitoba and Saskatchewan, Shaw said.
How are the markets reacting?
Shaw shares jumped 42 per cent to $34 but traded well below the offer price of $40.50, suggesting doubts about the deal, which is valued at $26 billion, including debt. Shares of Rogers were up seven per cent to $64.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
