Opinion: What would it take for Rogers to walk away from the Shaw deal?

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The Shaw Corporate HQ in Calgary May 9.Gavin John/

While Rogers RCI-BT keeps saying it is committed to consummating its marriage to Shaw, SJR-BT it’s possible the country’s largest telecom will walk away from the $26-billion takeover and leave its Calgary-based betrothed at the altar.

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What would force Rogers Communications Inc. to break things off? In a line: government-imposed constraints on the wireless business that is the Toronto-based company’s growth engine.

What exactly is Rogers’ pain point? That’s what analysts and fund managers who invested on expectations about the outcome of the acquisition of Shaw Communications Inc. were trying to figure out on Monday, as the federal Competition Bureau formally announced plans to block the deal.

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Competition Bureau seeks to block Rogers’ takeover of Shaw

To win over regulators, Rogers has already pledged to sell Shaw’s Freedom Mobile, a wireless carrier with 2.1 million customers. (Rogers has 11.3-million wireless subscribers.) Rogers chief executive Tony Staffieri has made it clear the takeover is being driven not by that side of the business, but rather by the $1-billion in annual synergies that would come from uniting the two companies ‘ massive cable networks.

Aside from the Competition Bureau, the takeover must also be approved by François-Philippe Champagne, the federal Minister of Innovation, Science and Industry. Mr. Staffieri’s nightmare scenario is that one of those two will sweeten any deal for Freedom by insisting on network sharing agreements or other measures that would benefit a buyer, to the detriment of the seller, Rogers.


Cutting the cord

Shaw is losing cable customers

1.39 million

1.28 million

1.28 million

1.23 million

FY 2020

FY 2021

Feb. 28

2021

Feb. 28

2022

Shaw has an Aug. 31 fiscal year end, numbers are annual

and for the first six months of fiscal 2022

Source: SHAW COMMUNICATIONS

Cutting the cord

Shaw is losing cable customers

1.39 million

1.28 million

1.28 million

1.23 million

FY 2020

FY 2021

Feb. 28

2021

Feb. 28

2022

Shaw has an Aug. 31 fiscal year end, numbers are annual and for

the first six months of fiscal 2022

Source: SHAW COMMUNICATIONS

Cutting the cord

Shaw is losing cable customers

1.39 million

1.28 million

1.28 million

1.23 million

FY 2020

FY 2021

Feb. 28

2021

Feb. 28

2022

Shaw has an Aug. 31 fiscal year end, numbers are annual and for the first six months of fiscal 2022

Source: SHAW COMMUNICATIONS

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Source: www.theglobeandmail.com

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