Rogers Communications has agreed to buy Shaw Communications for CAD 4.50 per share, in a transaction valued at CAD 26 billion, including CAD 6 billion worth of Shaw debt. The companies said the combination of the two family-founded Canadian companies will bring together Shaw’s existing cable, fibre and mobile network with Rogers’ national mobile network and 5G capabilities, creating the possibility of “unprecedented wireline and wireless broadband and network investments, innovation and growth in new telecommunications services, and greater choice for Canadian consumers and businesses.”
Combined company to invest CAD 2.5 billion into 5G
As part of the transaction, the combined company pledged to invest CAD 2.5 billion in 5G networks over the next five years across Western Canada.
Rogers said it plans to establish a new National Centre of Technology and Engineering Excellence in Calgary to support the needs of the new combined company. The move builds on the company’s existing commitment to R&D innovation in 5G in Western Canada through partnerships with the University of British Columbia and the University of Calgary.
Rogers has also committed to establishing a new CAD 1 billion Rogers Rural and Indigenous Connectivity Fund dedicated to connecting rural, remote and Indigenous communities across Western Canada to high-speed internet and closing connectivity gaps faster for underserved areas. With the fund, Rogers will consult with Indigenous communities to create Indigenous-owned and operated ISPs using Rogers’ expanded networks and capabilities to create sustainable, local connectivity systems and services.
The combined company also promised to continue to provide affordable wireless plans, with no overage fees. As part of this commitment, Rogers will not increase mobile prices for Freedom Mobile customers for at least three years following the close of the transaction. It will in addition expand its Connected for Success programme, to reach every Canadian where the combined company offers internet services. The programme is designed to help seniors and low-income Canadians access low-cost, high-speed internet, with multiple speed options.
3,000 new jobs
The deal also is expected to create up to 3,000 net new jobs. There will be new headquarters for all Western operations at Shaw’s Shaw Court in downtown Calgary. The president of Western operations and other senior roles will be based at the company’s Calgary headquarters, to lead the combined company’s operations across Western Canada. Brad Shaw, and another director to be nominated by the Shaw family, will be named to the Rogers board of directors after completion.
Rogers said it will after also maintain a strong local employee base in Western Canada, with a combined team of 10,000 across Alberta, British Columbia, Manitoba and Saskatchewan.
Transaction to close in 2022
The acquisition is not subject to any financing condition. Rogers said it has secured committed debt financing, which it will use to pay for the company along with cash on hard and the issue of 23.6 million shares to the Shaw Family Living Trust.
Under the agreement, holders of Shaw class A and B Shares will receive CAD 40.50 per share in cash. The Shaw Family Living Trust, the controlling shareholder of Shaw, and certain members of the Shaw family, will receive 60 percent of the consideration for their shares in the form of 23.6 million class B shares of Rogers, with the balance paid in cash.
The transaction needs the approval of two thirds of the votes cast by holders of Shaw class A and B shares. A special shareholders meeting will for this purpose be held in May. The Shaw Family Living Trust has agreed to vote all of its class A shares, representing 79 percent of all shares in that class, and class B shares in favour of the deal.
The acquisition is subject to other closing conditions, including regulatory approval. If these are received, it should close in the first half of 2022.
