Rogers Communications has signed a deal to purchase Shaw Communications in a transaction valued at $26 billion, together with debt.
Underneath the plan, Rogers can pay $40.50 in money for every of Shaw’s issued and excellent class A and sophistication B shares. Shaw’s class B shares closed at $23.90 on the Toronto Inventory Trade on Friday.
As a part of the transaction, the businesses mentioned Rogers will make investments $2.5 billion in 5G networks over the subsequent 5 years throughout Western Canada.
Rogers additionally says it can create a brand new $1 billion fund devoted to connecting rural, distant and Indigenous communities throughout Western Canada to high-speed web service.
“This mixture of two nice firms will create extra jobs and funding in Western Canada, join extra folks and companies, ship best-in-class-services and infrastructure throughout the nation and supply elevated competitors and selection for Canadian customers and companies,” Rogers CEO Joe Natale mentioned in a press release.
The mixed firm will create a Western regional headquarters in Calgary, the place the president of Western operations and different senior executives will probably be primarily based.
Shaw government chair and CEO Brad Shaw mentioned the transaction will create advantages for generations to return.
“Whereas unlocking super shareholder worth, combining (the) firms additionally creates a really nationwide supplier with the capability to speculate better sources expeditiously to construct the wireline and wi-fi networks that every one Canadians want for the long run,” Brad Shaw mentioned in a press release.
Rogers mentioned it has secured dedicated financing to cowl the money portion of the deal, whereas about 60 per cent of the Shaw household shares will probably be exchanged for 23.6 million Rogers B-class shares.
Brad Shaw and one other director to be nominated by the Shaw household — which can turn into one of many largest Rogers shareholders — will probably be named to the Rogers board.
The deal, which requires shareholder approval, is topic to different customary closing situations, in addition to approvals from Canadian regulators.
It’s anticipated to shut within the first half of 2022.