Rogers’ $16bn Acquisition of Shaw

By Lindsay Dempsey, Adil Amlaiky, Anish Umasuthan, Greta Horn, Ève Bouffard, Blake Dal Santo (McGill University), Ho Hai Ivan Chung, Kevin Lee, Harson Lin (Hong Kong University of Science and Technology)


Overview of the deal

Acquirer: Rogers Communications Inc

Target: Shaw Communications Inc

Implied Equity Value: US$16.0 billion

Total Transaction Size: US$21.4 billion

Acquirer advisor: Bank of America and Barclays

Target Advisor: TD Securities

The mega-deal marks the combination of the two largest cellular and cable operators in Canada and the speed-up of 5G rollout in the country, yet under regulatory review and approval.

Currently, Rogers is one of the top 3 mobile service providers in Canada, which concentrates its business in the urban centres of Ontario. Shaw ranks fourth in the industry and is strong in Western Canada. By combining the two providers, Rogers can surpass Telus Corp and take on Bell in the intensified telecommunication market. On top of that, it can also pay the wave for its expansion under 5G rollout. In fact, as part of the transaction, the combined company will invest US$2billion in 5G networks and US$800 million to improve internet access in rural areas.

It is still too early to say whether the deal can be closed since regulatory scrutiny is the biggest obstacle. The telecommunication industry in Canada is a highly competitive yet concentrated market, with the top 3 providers sharing around 90% of the market revenue. The proposed deal will eliminate the fourth-largest player in the industry and further consolidate the leading role of the top 3. Under this situation, the deal will be reviewed by three government agencies, including the competition bureau, the Canadian telecommunications regulator and the department of industry.

“We’re at a critical inflexion point where generational investments are needed to make Canada-wide 5G a reality… Fundamentally, this combination of two great companies will create more jobs and investment in Western Canada.” - Joe Natale, President and CEO (Rogers Communications)

Company Details: (Acquirer - Rogers Communications)

Rogers Communications is a Canadian telecom and media company, operating primarily in Wireless (61% of revenue), Cable (28% of revenue; Internet, television, telephony, etc.) and Media (11% of revenue; Sports and entertainment, television and radio broadcasting, etc.). Almost all of its operations and sales are based in Canada. As of 2020, Rogers had 10.9 million wireless subscribers, 2.6 million internet subscribers and was the largest wireless telecom by revenue in Canada with 32.4% market share, followed by Bell Canada (29.2%) and Telus (28.9%). It also competes with Shaw Communications for television service.

Founded in 1960, headquartered in Toronto, Canada

President & CEO: Joe Natale

Number of employees: 23,500

Market Cap: $25.7B (as of 07/05/2021)

EV: $41.3B

LTM Revenue: $11.5B


LTM EV/Revenue: 3.6x