Rogers (TSX:RCI) To Buy Shaw Communications (TSX:SJR) In C$26Bn Deal

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Summary

  • Major Canadian telecom giants Rogers Communications Inc (TSX: RCI.B) and Shaw Communications Inc (TSX: SJR.B) have finally put rumors that were long around to rest.
  • Following the announcement, Shaw communications stock skyrocketed by 36 per cent on Monday morning (10:23AM EST).
  • Rogers stock was also up by a little over five per cent around the same time.

Major Canadian telecom giants Rogers Communications Inc (TSX: RCI.B) and Shaw Communications Inc (TSX: SJR.B) have finally put rumors that were long around to rest – the two are set to merger.

The companies released their statements early on Monday, March 15, announcing that Rogers will be buying all of Shaw’s outstanding shares for a deal of C$ 40.5 apiece, which, including assumed debt, will be worth C$ 26 billion.

Following the announcement, Shaw communications stock skyrocketed by 36 per cent on Monday morning (10:23AM EST). Rogers stock was also up by a little over five per cent around the same time.

©Kalkine Group 2021

 

Let’s dive in to learn more about the Rogers and Shaw deal.

 

Rogers & Shaw Merger Deal – Key Insights


If and when the deal finally closes, Rogers and Shaw Communications said that the merged entity would invest C$ 2.5 billion to build and enhance the 5G network capacity in Western Canada over a period of five years. The two telecom giants have also agreed to set aside about C$ 1 billion for developing high-speed internet services for rural and Indigenous communities in the country.

Shaw Communications CEO Brad Shaw is set to join the board of directors at the new merged company along with another Shaw nominee once the deal closes. Speaking about the deal, he said in a statement that both Shaw and Rogers  could gain access to “tremendous shareholder value” via the merger.

©Kalkine Group 2021

 

The combined entity will have a head office in Calgary, where Shaw Communications is currently based, for all its Western operations. With two major corporations joining forces, the deal will also see creation of up to 3,000 net new jobs.

On the stock front, Rogers Communications climbed about five per cent this year. Shaw stocks, on the other hand, have surged by nearly 42 per cent year-to-date.

 

 


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