Offer Accepted, Rodgers to Pay a 69% Premium
The board of Shaw Communications accepted Roger’s cash offer of $40.50 CAD per share, the two companies said Monday. Rogers will pay a 69% business premium compared to the Shaw closing share price on Friday.
The total business value of the deal stands at around a Canadian price tag of $26 billion CAD ($20.85 billion USD), including debt.
“Western Canada is a major driver of our national economy and together we will have the scale, expertise, and commitment to deliver the technology infrastructure needed to keep local communities connected, businesses competitive and attract new investment,” said Joe Natale, CEO of Rogers Communications.
The deal will merge the two telecom giants controlled by the two most powerful business families in Canada. Rogers and Shaw have both competed and collaborated over the past years, sharing and sometimes trading cable territories.
“Today’s announcement brings two iconic Canadian family-founded businesses together with the expertise, combined assets, and scale to deliver the next generation of telecommunications to Canadian consumers and businesses,” said Edward Rogers, Chairman of Rogers Communications, added in the statement.
Over the years, Shaw has been mostly focused on the country’s western provinces while Rogers controlled Ontario.
According to Rogers, the transaction will add to earnings and cash flow per share in the first year after the deal is completed, and those cost savings will rise to more than $1 billion CAD ($800 million USD) annually in two years.
The deal is expected to close in the first half of next year, and the new company plans to inject $2.5 billion CAD ($2.0 billion USD) in 5G networks over the next five years across Western Canada, Rogers stated. The merger is also expected to bring new growth and efficiency opportunities and boost the development of 5G capabilities.
Rogers says it will set up a new $1 billion CAD ($1.25 billion USD) “Rogers Rural and Indigenous Connectivity Fund” in a bid to bring high-speed internet to rural, remote, and Indigenous communities in Western Canada as well as close connectivity gaps in underserved regions. Furthermore, it is expected that this deal will create about 3,000 new jobs.
Rogers Communications agreed to acquire rival Shaw Communications Inc. in a $20.8 billion CAD business deal that will merge the two largest telecom companies in Canada.
About the Author
An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.