Image: Screenshot, March 15, 2021. Source: rogers.com
(Reuters) – Rogers Communications Inc said on Monday it agreed to buy rival Shaw Communications Inc for about C$20.0 billion (US$16.0 billion) in a deal that would create Canada’s No. 2 cellular operator but is likely to face stiff regulatory scrutiny.
By acquiring fourth-ranked Shaw, Rogers would leapfrog Telus Corp, the current No. 2 operator, taking on market leader BCE Inc.
Shaw shareholders will receive C$40.50 per share, representing a premium of nearly 70% premium to its Friday close. Including debt, the deal is valued C$26.0 billion (US$20.8 billion).
The deal will face review by the independent Competition Bureau of Canada, the Canadian Radio-television and Telecommunications Commission (CRTC), as well as the department of Innovation, Science, and Economic Development (ISED).
Canadian Innovation Minister Francois-Philippe Champagne said the review would focus on “affordability, competition, and innovation.”
Toronto-based Rogers said that once it acquires Calgary based Shaw, it plans to spend C$2.5 billion on ramping up 5G networks in Western Canada over the next five years,
“It’s really too early to speculate on the regulatory outcome overall,” Rogers Chief Executive Officer Joseph Natale said in a conference call. “But we feel confident this transaction will be approved.”
Still, in a sign of possible doubts about the deal, U.S.-listed shares of Shaw Communications were up 57% at $30.30 in premarket trading on Monday.
The deal brings two of the country’s biggest family-founded telecom businesses together, making a combined C$19 billion in annual revenue. BCE raked in C$22.9 billion last year, while Telus had C$15 billion in revenue.
($1 = 1.2456 Canadian dollars)
Reporting by Eva Mathews in Bengaluru and David Ljunggren; Editing by Shailesh Kuber and Anil D’Silva.
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Source: Reuters
