Rogers to buy Shaw in $20B cable deal

Including debt, the deal is worth about $26 billion

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Rogers Communications Inc. agreed to buy rival Shaw Communications Inc. in a $20-billion deal that unites Canada’s two largest cable providers.

The $40.50-per-share cash offer has the support of Shaw’s board, the companies said Monday. The proposal represents a 69% premium to Shaw’s most recent closing price.

The transaction represents the merger of companies controlled by two of Canada’s most powerful business families, who have co-operated as well as competed over the years in the battle against telecommunications rivals Telus Corp. and BCE Inc. Rogers and Shaw have carved up, and sometimes traded, rival cable territories — with Shaw focused on Canada’s western provinces and Rogers dominating Ontario.

Rogers said the deal will add to earnings and cash flow per share in the first year after closing and that cost savings from the deal will top $1 billion annually within two years.

Including debt, the deal is worth about $26 billion. Shaw CEO Brad Shaw will join the Rogers board.