Canadian regulators approved Rogers Communications Inc.’s purchase of the cable television assets of Shaw Communications Inc., removing another hurdle to the companies’ $16 billion deal.
The decision is the first of three government approvals needed for Rogers to complete its takeover of Shaw. The deal still needs to be cleared by the country’s antitrust watchdog and by the federal government, which has the final say on transactions involving wireless spectrum.
Shaw shares have been marching closer to the takeover price of C$40.50 apiece as investors bet that the deal is a sure thing. Rogers is up 11% this year, the biggest gain among Canadian telecommunications stocks.
“Our team is continuing to work toward completing the thorough regulatory reviews that remain underway to deliver our shareholders the value they expect to receive upon closing, expected to be in the first half of 2022,” Shaw Chief Executive Officer Brad Shaw said in a statement.
The antitrust review is expected to be the most difficult obstacle to clear. Rogers is Canada’s largest wireless provider and Shaw is the no. 4 player in a number of markets. Rogers has already opened a data room and begun talks with potential buyers of Shaw’s wireless division in the expectation that it won’t be allowed to keep it.
The acquisition of Shaw would combine Canada’s largest cable television providers — Rogers dominates the eastern part of the country and Shaw rules the west. As part of the takeover, Rogers is acquiring 16 cable services based in Western Canada, a national satellite television service and other broadcast and television assets from Shaw, the Canadian Radio-television and Telecommunications Commission said.
The regulator attached a number of conditions to the cable acquisition, including that Rogers contribute C$27.2 million ($21.7 million) to several media funds. The company must also employ more journalists at its Citytv stations across the country and produce additional news specials.
Rogers will have to distribute at least 45 independent English and French-language services on its cable and satellite services.
“Shaw customers should get set for higher TV and internet prices, and a ‘forced march’ to Rogers’ Ignite TV platform,” said John Lawford, executive director of Public Interest Advocacy Center. “We were particularly disappointed that the CRTC appears to have completely ignored the potential cost effect on consumers.” Bloomberg