The Canadian firm secured the subsidiary equity investment as it’s looking to improve its financial position by reducing debt after its balance sheet became increasingly debt-heavy following its acquisition of Shaw Communications.
Rogers is essentially selling a stake in a new subsidiary to Blackstone, which will own a minor part of the company’s wireless network, with plans to use those proceeds to pay down debt. Rogers will, however, maintain full operational control of the network.
“This strategic partnership demonstrates the confidence investors have in Rogers and in our world-class assets,” said Tony Staffieri, president and CEO of Rogers Communications. “With this significant investment, we are executing on our commitment to de-lever our balance sheet.”
Rogers completed a USD$15 billion acquisition of Shaw Communications back in 2023 after the Canadian government previously blocked the deal over competition fears.
The Canadian firm has now brought in an investor group led by Blackstone to fuel its debt repayment plan.
Alongside the investment giants, other backers include Canada Pension Plan Investment Board (CPP Investments), Caisse de dépôt et placement du Québec, the Public Sector Pension Investment Board (PSP Investments) and British Columbia Investment Management Corporation.
“This transaction will strengthen the company’s investment grade balance sheet by reducing our borrowings and unlocking the unrecognised value of critical assets,” said Glenn Brandt, CFO at Rogers.
“With this transaction, Rogers will have issued an aggregate CAD$9 billion of equity-valued capital since year-end, which is expected to reduce leverage by almost 1 turn.”
Following the transaction, Blackstone will retain a 49.9% equity interest in the new subsidiary, along with a 20% voting interest. Rogers will hold a 50.1% equity interest and the remaining voting rights.
The Canadian firm will hold the right to purchase Blackstone’s interest in the subsidiary any time between the eighth and twelfth anniversaries of the deal closing.
The transaction is expected to close in the second quarter of 2025.
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