Blackstone and Canadian Funds Invest $5 Billion in Rogers
- Business Companies Investments World
Global Business Magazine- 4 minutes read
Canada’s leading communications and entertainment company Rogers Communications has entered into an agreement with funds managed by the US investment management company Blackstone, which are backed by leading Canadian institutional investors, for a $4.92 billion equity investment.
Under the terms of the transaction, Blackstone will acquire a non-controlling interest of 49.9% with 20% voting interest in a new Canadian subsidiary of Rogers, which will maintain full operational control, ensuring that the quality of its wireless network remains uncompromised, and will include the financial results of the subsidiary in its consolidated financial statements.
At any time between the eighth and twelfth anniversaries of closing, Rogers will have the right to purchase Blackstone’s interest in the subsidiary, Rogers, which is valued at $14.35 billion in market capitalisation, said on Friday.
Subject to satisfaction or waiver of all closing conditions, the transaction is expected to close in the second quarter of 2025. Separately, Rogers intends to seek consent from the holders of its outstanding senior notes for certain proposed clarifying amendments to its bond indentures.
The equity investment from Blackstone and the Canadian institutional investors, include CPP Investments, Caisse de dépôt et placement du Québec, PSP Investments, and British Columbia Investment Management Corporation. Rogers intends to use the net proceeds from the transaction to repay debt.
According to market watchers, this acquisition represents more than just a financial boost and the deal is a key step in its ongoing efforts to strengthen its market position, reduce debt, and unlock the true potential of its wireless infrastructure. By partnering with Blackstone and its powerful allies, Rogers gains the strategic resources needed to navigate the competitive Canadian telecom landscape.
Shows Investors’ Confidence
President and CEO of Rogers Communications Tony Staffieri said that this strategic partnership demonstrates the confidence investors have in Rogers and in their world-class assets. With this significant investment, the company was executing on its commitment to de-lever the balance sheet.
Chief Financial Officer of rogers Communications Glenn Brandt said that this transaction will strengthen the company’s investment grade balance sheet by reducing their borrowings and unlock the unrecognised value of critical assets. The deal will see Rogers have issued an aggregate $9 billion of equity-valued capital since year-end, which is expected to reduce leverage by almost 1 turn, he said.
The subsidiary is expected to distribute up to approximately $280 million annually to Blackstone in the first five years post-closing. Rogers average capital cost through to the end of the period for purchase is expected to be 7% per annum.
The investment in a portion of Rogers wireless backhaul transport infrastructure will be reported as equity in Rogers consolidated financial statements, and is expected to be considered an equity investment by Moody’s Investors Services, Inc., S&P Global Ratings, a division of S&P Global Inc., and DBRS Limited.
