Anxiety in Alberta over $26-billion Shaw acquisition as Rogers promises jobs and investment

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CALGARY – The proposed acquisition of Edmonton-founded, Calgary-headquartered telecommunications provider Shaw Communications Inc. by a Toronto behemoth is causing fresh anxiety in a province that has suffered from recessions and a steady exit of talent and companies over the past decade.

Toronto-based Rogers Communications Inc. announced Monday it would purchase Shaw for $26 billion, a value that includes the company’s debt, but promised to keep a Western head office and related team in Calgary, where the company has pledged to add jobs.

The deal is stirring up concerns in Calgary, which is home to the most corporate headquarters in Western Canada, and where the presence of local players such as Shaw and WestJet had previously been held up as proof that non-oil and gas sector companies can be built into large corporations in oil-rich Alberta. That pitch has eroded in recent years. In 2019, Toronto-based Onex Corp. took WestJet private in a $5.4-billion deal, and the latest deal with Rogers signals the end of another storied Western Canadian company as a standalone business stalwart.

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“We would prefer that Rogers under this merger locate its national headquarters here in Alberta,” Jason Kenney, Albreta’s premier, said Monday, adding the deal would present a “net benefit” to the province as Rogers has committed to hiring in the province and building a new research centre in Calgary.

Kenney said he spoke to Rogers executives on the weekend and the company’s commitment to spend $2.5 billion building out its 5G network in Western Canada, which would be focused in large part in Alberta, meaning there would be a significant number of new jobs locally and better internet and wireless connections throughout rural Alberta.

“I would be a lot more concerned if this represented a net loss of jobs,” Kenney said.

Rogers is committing to add 3,000 net jobs in Western Canada with 1,800 in Alberta alone, keep its Western operations headquartered in Calgary, and plans to establish a National Centre of Technology and Engineering Excellence in Calgary.

“Fundamentally, this combination of two great companies will create more jobs and investment in Western Canada, connect more people and businesses, deliver best-in-class services and infrastructure across the nation, and provide increased competition and choice for Canadian consumers and businesses,” Rogers CEO Joe Natale said in a release.

Rogers said it will also set up a $1-billion fund to provide rural, remote and Indigenous communities across Western Canada with high-speed internet and upgraded infrastructure. “As part of this fund, Rogers will consult with Indigenous communities to create Indigenous-owned and operated Internet Service Providers, which would leverage Rogers expanded networks and capabilities to create sustainable, local connectivity solutions,” the company said.

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Still, there are concerns across the Western Canadian business community that the deal would equate to the loss of a head office and related jobs in a sector of the economy that most Alberta residents want to see thrive, especially as the province focuses on more economic diversification such as technologies and communications.

“We’re trying to diversify our economy and telecom is one area that is not oil and gas. They made comments about hiring more people in Western Canada to try to appease that but when you have a headquarters that isn’t here, there are some risks attached to that,” said Martin Pelletier, managing director and portfolio manager at Wellington-Altus Private Counsel in Calgary.

From a competitive standpoint, Pelletier said he would have liked to have seen Shaw, a regional player, make inroads in Eastern Canada and elsewhere.

“It would be great to see a success story coming out of Alberta, using it as a launching pad to expand across Canada in addition to internationally,” he said.

Similarly, Auspice Capital Partners president and chief investment officer Tim Pickering said there are always concerns for Western Canadians when an important local business is purchased by companies from outside the Western region.

“I think that’s the biggest concern for Western Canadians — we’ve got these great plans and big promises,” Pickering said. “That sounds great, but the question is how confident are we in that?”

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However, the deal is likely to be welcomed in rural Alberta, where Rogers has said it will expand its wireless capabilities.

“I’m a big fan of as many headquarters as possible, as long as you can compete globally,” said Art Price, the former CEO of Husky Energy Inc. and current chairman of Sunterra Market and real-estate data firm Bode Canada, adding the deal would allow Rogers to compete in rural Alberta where Telus Corp. currently holds a major advantage.

“Alberta will be better off from a competition and service point of view than under the status quo,” said Price, who lives in rural Alberta and believes the deal will result in new competition in the rural region.

Rogers’ commitments to spending money and hiring in Western Canada shows Shaw “has done some significant work” to ensure the deal benefits Calgary and the West, Business Council of Alberta president and CEO Adam Legge said in an emailed statement.

“At the end of the day, this is good news that others see this much value in an Alberta company, and are willing to offer a premium for it,” Legge said.

Financial Post

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