With a multi-billion dollar deal that would merge two of the most powerful business families in Canada, Rogers Communications has agreed to buy its rival Shaw Communications and red flags are already being raised for what it could mean for consumers. The transaction is valued at CA$26 billion, including $6 billion in debt. Rogers and Shaw carved up Canada when it came to cable and internet service while they were fierce competitors in the wireless sector. Now Rogers is promising to spend $2.5 billion to build 5G networks in western Canada, plus $1 billion to give rural, remote and Indigenous communities high-speed Internet.
The proposed transaction received a warm reaction from market watchers, with investors bidding up both companies’ shares after the announcement. Shaw shares jumped 42 per cent to $34 a share at the market open, although they failed to rise to match Rogers’ offer price of $40.50.
None of it will happen unless it gets federal approval and that will require explaining why less competition is good for consumers. Mike Drolet has more.
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