By Shruti Shekar Yahoo Finance Canada
Toronto-based telecom company Rogers Communications (RCI) has agreed to buy Calgary-based telecom company Shaw Communications (SJR) for $20 billion in cash.
The two companies said in a release that Rogers will acquire all of Shaw’s outstanding Class A and B shares at a price of $40.50 per share, a 69% premium to Friday’s close. Rogers will also assume $6 billion in Shaw debt.
Rogers says the combined company will add 3,000 jobs and invest $2.5 billion in 5G networks over the next five years across Western Canada to “enhance competitiveness, offer consumers and businesses more choice and improved services, help close the digital divide between urban and rural communities, and deliver significant long-term benefits for businesses and consumers.”
The purchase has been unanimously approved by both Rogers’ and Shaw’s boards of directors, and has the support of the Shaw Family, which founded the company in 1966. Shaw CEO Brad Shaw will have a seat on the Rogers board, and the Shaw family will be able to nominate one other board position.
The transaction requires approval from Innovation, Science and Economic Development, the CRTC, and the Competition Bureau.
“We’re at a critical inflection point where generational investments are needed to make Canada-wide 5G a reality. 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,” said Rogers’ CEO Joe Natale in the release.