Rogers Communications to buy rival Shaw for $26bn

May 2021 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

May 2021 Issue

In an agreement which will create new jobs and investment in Western Canada and accelerate the rollout of 5G networks, Rogers Communications is to acquire Shaw Communications in a transaction valued at $26bn.

Under the terms of the transaction, holders of Shaw class A shares and class B shares will receive $40.50 per share in cash. In addition, 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.

As part of the transaction, the combined company will invest $2.5bn in 5G networks over the next five years across western Canada, which will enhance competitiveness, offer consumers and businesses more choice and improved services, help close the digital divide between urban and rural communities, as well as deliver significant long-term benefits for businesses and consumers.

According to Rogers, the Canadian telecom industry is at an inflection point, with the ability to scale and make 5G a reality for all Canadians and close the connectivity gap having never been more important. Indeed, as 5G redefines the innovation landscape, Rogers believe significant multibillion-dollar investments are needed to deliver the connectivity that communities, consumers and businesses need, and Canada deserves.

“Generational investments are needed to make Canada-wide 5G a reality,” said Joe Natale, president and chief executive of Rogers Communications. “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. Fundamentally, this combination of two great companies will create more jobs and investment in Western Canada, connect more people and businesses, deliver best-in-class-services and infrastructure across the nation.”

The combination of Rogers and Shaw builds on the strong legacy of two family-founded Canadian companies and their shared history of service, innovation, customer service and community support. Both started as small family-run businesses and have grown to become large, successful telecom companies committed to innovation, customer service and giving back to their communities.

“Our two companies have been successful because of the foresight and vision of two great founders who were driven by their unrelenting pioneering spirit and entrepreneurial values,” said Brad Shaw, executive chair and chief executive of Shaw. “While unlocking tremendous shareholder value, combining these two great companies also creates a truly national provider with the capacity to invest greater resources expeditiously to build the wireline and wireless networks that all Canadians need for the long term.”

Acting as financial advisers to Rogers are BofA Securities and Barclays, while Goodmans LLP is legal adviser. Exclusive financial adviser to Shaw is TD Securities Inc., with Davies Ward Phillips & Vineberg LLP and Wachtell, Lipton Rosen & Katz as legal advisers.

Subject to customary closing conditions, including court and stock exchange approval as well as approvals from Canadian regulators, the transaction is expected close in the first half of 2022.

Edward Rogers, chairman of Rogers, concluded: “This transformational combination extends our company’s long legacy of innovation, entrepreneurship, and dedication to world-class service for decades to come.”

Fraser Tennant