Toronto-based national carrier Rogers has signed a deal to purchase Shaw Communications in a transaction valued at $26 billion.
The carrier says the acquisition will build on the legacy of two family-founded Canadian companies and that together, they will have the capability to deliver unprecedented wireline and wireless broadband and network investments.
Rogers has stated that it will not increase wireless prices for Freedom Mobile customers for at least three years following the close of the transaction.
“Without a doubt, my father would be proud of this moment, combining forces with the company founded by his old friend to deliver more Canadians world class connectivity, more choice, and better value,” said Shaw Communications CEO Brad Shaw in a press release.
Brad Shaw, and another director to be nominated by the Shaw family, will join the Rogers Board of Directors when the transaction closes. The Shaw family will also become one of the largest Rogers shareholders.
As part of the investment, Rogers says it will invest $2.5 billion in 5G networks over the next five years across Western Canada. The carrier has also committed to creating a new $1 billion Rural and Indigenous Connectivity Fund.
“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, and provide increased competition and choice for Canadian consumers and businesses,” said Rogers CEO Joe Natale.
Rogers says it will maintain and grow local Shaw jobs and that new technology and network investments will create up to 3,000 jobs across Western Canada.
The two carriers say the transaction is expected to close in the first half of 2022.
The deal still requires regulatory approval and will likely receive scrutiny from the federal government, as it would eliminate a competitor from the Canadian telecommunications market. Some parts of Canada would go from having four providers to three.
In a statement regarding the announcement, Innovation Minister François-Philippe Champagne said the government is committed to greater affordability, competition and innovation.
“These goals will be front and centre in analyzing the implications of today’s news. The transaction will be reviewed by the independent Competition Bureau of Canada, the Canadian Radio-television and Telecommunications Commission, as well as the department of Innovation, Science and Economic Development and we won’t presuppose the outcomes of these processes,” he stated.
Further, the Competition Bureau issued a statement noting that “should the Bureau determine that the proposed transaction is likely to substantially lessen or prevent competition, we will not hesitate to take appropriate action.”
Rogers has been looking to expand its presence across the country via acquisition, as the carrier launched a bid to acquire Cogeco last year.
The carrier partnered with Altice USA in a bid to purchase Cogeco’s Canadian assets for a net purchase of around $4.9 billion CAD. The deal was rejected by the Audet family, which controls Cogeco, several times after the family said they did not intend to sell their shares.