Rogers, Shaw swap cable assets, strike Internet alliance
Rogers Communications of Toronto and Shaw Communications of Calgary announced a major deal Thursday that involves the swapping of cable assets and the creation of an Internet alliance.
Shaw pays $75.9 million for gaining 23,000 more subscribers.
Shaw will sell its nine per cent holdings in Cogeco Cable and Cogeco Inc. for $198 million
Rogers will pay $44 a share for about 4.5 million shares.
Rogers will sell to Shaw its interest in Canadian Satellite Communications for $94 million - four million shares at $23.50 apiece.
Under the deal Shaw will pick up Roger's cable assets in British Columbia, primarily in the Vancouver market in exchange for Shaw's cable operations in Ontario and Quebec.
"These transactions will continue our clustering strategy in Central and Eastern Canada," Ted Rogers, president and chief executive of Rogers, said in a release.
The new cable operations when combined with Rogers' proposed merger with Videotron, will create a super-cluster of approximately, 3.5 million customers in Ontario and Quebec connected by fibre.
"We are also looking forward to serving our approximately 200,000 new customers in the province of New Brunswick," added Rogers.
Head of Shaw Communications, Jim Shaw, said the swap would mean that Shaw will become the most clustered and interconnected cable company in Western Canada with approximately 1.86 million subscribers.
"In our view, Vancouver is a key urban centre in Canada with good growth potential and an improving economy," Shaw said.
The deal also involves the merger of @Home Canada and Excite Canada into a high speed Internet portal. Rogers will be a majority owner with 51 per cent while Shaw and Excite @Home will own 22.5 per cent each. Cogeco and Moffat Communications will also be invited to become partners.