In Canada: Rogers To Buy Shaw In $16B Cable Deal

Rogers Communications Inc. agreed to buy rival Shaw Communications Inc. in a C$20 billion ($16 billion) deal that would unite Canada’s two largest cable providers and shake up its wireless industry, reports Bloomberg.

The C$40.50-per-share cash offer has the support of Shaw’s board and isn’t conditional on financing, the companies said Monday. The proposal represents a 69% premium over Shaw’s most recent closing price.

The transaction represents the merger of companies controlled by two of Canada’s most powerful business families, who have cooperated as well as competed over the years in the battle against telecommunications rivals Telus Corp. and BCE Inc.

Rogers and Shaw have carved up, and sometimes traded, rival cable territories -- with Shaw focused on Canada’s western provinces and Rogers dominating Ontario. But Rogers has pulled far ahead of Shaw by virtue of its large wireless division, a business in which Shaw’s Freedom Mobile unit is a distant fourth place in Canada. That’s one reason Shaw’s share price has fallen over the past five years.

The deal needs approval from the Canadian government, which would have to accept a reduction of competition in the wireless sector, as some parts of the country would go from four to three wireless providers. The review could take a year, and Rogers and Shaw don’t expect the transaction to close until the first half of 2022.

“This transaction will create long-term value for both companies’ shareholders, and just as important, this transaction will ensure Canada’s cable and wireless industry can support the significant capital requirements needed for 5G networks and the essential connectivity that rural Canadians desperately need,” Rogers Chief Financial Officer Tony Staffieri said on a conference call with analysts.

Shaw Chief Executive Officer Brad Shaw and another director nominated by the Shaw family will join the Rogers board.