Rogers concludes definitive agreement for CDN$7 billion equity investment
Rogers Communications (TSX: RCI.A, RCI.B; NYSE: RCI) has secured a CDN$7 billion equity investment through a definitive agreement with Blackstone and leading Canadian institutional investors. The deal involves Blackstone acquiring a 49.9% equity stake (20% voting interest) in a new Canadian subsidiary that will own a portion of Rogers' wireless network, while Rogers maintains 50.1% equity (80% voting interest) and full operational control.
The transaction, expected to close in Q2 2025, will strengthen Rogers' balance sheet by reducing debt leverage ratio by 0.7x. The subsidiary is projected to distribute approximately CDN$0.4 billion annually to Blackstone in the first five years post-closing, with Rogers' average capital cost expected at 7% per annum through the purchase period. Rogers will have the right to purchase Blackstone's interest between the eighth and twelfth anniversaries of closing.
Rogers Communications (TSX: RCI.A, RCI.B; NYSE: RCI) ha ottenuto un investimento in capitale di 7 miliardi di dollari canadesi attraverso un accordo definitivo con Blackstone e importanti investitori istituzionali canadesi. L'accordo prevede che Blackstone acquisisca una partecipazione azionaria del 49,9% (20% di interesse di voto) in una nuova sussidiaria canadese che possiederà una parte della rete wireless di Rogers, mentre Rogers manterrà il 50,1% di partecipazione (80% di interesse di voto) e il pieno controllo operativo.
La transazione, prevista per chiudere nel secondo trimestre del 2025, rafforzerà il bilancio di Rogers riducendo il rapporto di indebitamento di 0,7x. Si prevede che la sussidiaria distribuisca circa 400 milioni di dollari canadesi all'anno a Blackstone nei primi cinque anni dopo la chiusura, con un costo medio del capitale di Rogers previsto al 7% annuo durante il periodo di acquisto. Rogers avrà il diritto di acquistare l'interesse di Blackstone tra l'ottavo e il dodicesimo anniversario della chiusura.
Rogers Communications (TSX: RCI.A, RCI.B; NYSE: RCI) ha conseguido una inversión de capital de 7 mil millones de dólares canadienses mediante un acuerdo definitivo con Blackstone y destacados inversores institucionales canadienses. El acuerdo implica que Blackstone adquiera una participación del 49,9% (20% de interés de voto) en una nueva subsidiaria canadiense que poseerá una parte de la red inalámbrica de Rogers, mientras que Rogers mantendrá el 50,1% de participación (80% de interés de voto) y el control operativo total.
Se espera que la transacción se cierre en el segundo trimestre de 2025, lo que fortalecerá el balance de Rogers al reducir el ratio de apalancamiento de deuda en 0,7x. Se proyecta que la subsidiaria distribuya aproximadamente 400 millones de dólares canadienses anualmente a Blackstone en los primeros cinco años posteriores al cierre, con un costo promedio de capital de Rogers previsto en el 7% anual durante el período de compra. Rogers tendrá el derecho de adquirir el interés de Blackstone entre el octavo y el duodécimo aniversario del cierre.
로저스 커뮤니케이션즈 (TSX: RCI.A, RCI.B; NYSE: RCI)는 블랙스톤 및 주요 캐나다 기관 투자자들과의 확정 계약을 통해 70억 캐나다 달러의 자본 투자를 확보했습니다. 이 거래는 블랙스톤이 로저스의 무선 네트워크 일부를 소유할 새로운 캐나다 자회사의 49.9% 지분(20% 의결권)을 인수하는 내용을 포함하며, 로저스는 50.1%의 지분(80% 의결권)과 전체 운영 통제를 유지합니다.
2025년 2분기에 거래가 종료될 것으로 예상되며, 이는 로저스의 대차대조표를 강화하고 부채 레버리지 비율을 0.7배 감소시킬 것입니다. 자회사는 종료 후 첫 5년 동안 블랙스톤에 약 4억 캐나다 달러를 매년 분배할 것으로 예상되며, 로저스의 평균 자본 비용은 구매 기간 동안 연 7%로 예상됩니다. 로저스는 종료 후 8주년과 12주년 사이에 블랙스톤의 지분을 구매할 권리를 갖습니다.
Rogers Communications (TSX: RCI.A, RCI.B; NYSE: RCI) a sécurisé un investissement en capital de 7 milliards de dollars canadiens grâce à un accord définitif avec Blackstone et des investisseurs institutionnels canadiens de premier plan. L'accord implique que Blackstone acquière une participation de 49,9% (20% de droit de vote) dans une nouvelle filiale canadienne qui possédera une partie du réseau sans fil de Rogers, tandis que Rogers conserve 50,1% de participation (80% de droit de vote) et le contrôle opérationnel total.
La transaction, qui devrait se conclure au deuxième trimestre 2025, renforcera le bilan de Rogers en réduisant le ratio d'endettement de 0,7x. La filiale devrait distribuer environ 400 millions de dollars canadiens par an à Blackstone au cours des cinq premières années suivant la clôture, avec un coût moyen du capital de Rogers prévu à 7% par an pendant la période d'achat. Rogers aura le droit d'acheter l'intérêt de Blackstone entre le huitième et le douzième anniversaire de la clôture.
Rogers Communications (TSX: RCI.A, RCI.B; NYSE: RCI) hat eine Kapitalinvestition in Höhe von 7 Milliarden kanadischen Dollar durch eine endgültige Vereinbarung mit Blackstone und führenden kanadischen institutionellen Investoren gesichert. Der Deal sieht vor, dass Blackstone eine Beteiligung von 49,9% (20% Stimmrecht) an einer neuen kanadischen Tochtergesellschaft erwirbt, die einen Teil von Rogers' drahtlosem Netzwerk besitzen wird, während Rogers 50,1% Beteiligung (80% Stimmrecht) und die volle operative Kontrolle behält.
Die Transaktion, die im zweiten Quartal 2025 abgeschlossen werden soll, wird die Bilanz von Rogers stärken, indem das Verschuldungsverhältnis um 0,7x gesenkt wird. Es wird erwartet, dass die Tochtergesellschaft in den ersten fünf Jahren nach dem Abschluss jährlich etwa 400 Millionen kanadische Dollar an Blackstone ausschüttet, wobei die durchschnittlichen Kapitalkosten von Rogers während der Kaufperiode auf 7% pro Jahr geschätzt werden. Rogers hat das Recht, zwischen dem achten und dem zwölften Jahrestag des Abschlusses das Interesse von Blackstone zu erwerben.
- Secures substantial CDN$7 billion equity investment
- Reduces debt leverage ratio by 0.7x
- Maintains operational control with 80% voting interest
- Total of $9 billion in equity-valued capital raised since year-end
- Will distribute CDN$0.4 billion annually to Blackstone for first 5 years
- 7% annual capital cost through purchase period
- Partial loss of wireless network asset ownership
Insights
Rogers' CDN$7 billion equity transaction with Blackstone represents a significant balance sheet improvement without sacrificing operational control. The deal structure is particularly noteworthy - Rogers sells a 49.9% equity stake (with only 20% voting rights) in a subsidiary holding some wireless network assets, while maintaining 80% voting control and consolidating the subsidiary's financials.
The immediate 0.7x reduction in debt leverage ratio addresses a key investor concern following Rogers' Shaw acquisition. Combined with other capital raising initiatives, Rogers will have issued $9 billion in equity-valued capital since year-end, reducing leverage by nearly a full turn - a substantial improvement for a telecommunications balance sheet.
The transaction's structure reveals financial sophistication. While Rogers will distribute approximately CDN$0.4 billion annually to Blackstone during the first five years, this is effectively a capital cost of around 7% per annum - reasonable for this type of arrangement given current market conditions. The call option between years 8-12 provides strategic flexibility for eventual reacquisition.
The backing from major Canadian institutional investors, including CPP Investments and CDPQ, signals strong confidence in Rogers' assets and management. Most importantly, Rogers maintains complete operational control of its wireless network while unlocking significant capital from what are likely undervalued infrastructure assets.
This transaction exemplifies the growing trend of monetizing telecommunications infrastructure assets while preserving operational integrity. Rogers has cleverly structured this deal to extract CDN$7 billion from passive network elements without compromising network control or customer experience.
The key technical detail is that Rogers is only selling interests in "backhaul transport infrastructure" - essentially the passive components connecting cell sites to the core network. This is precisely the type of infrastructure asset institutional investors value for stable, long-term returns. By maintaining full operational control of the wireless network, Rogers preserves its ability to manage service quality, implement technology upgrades, and maintain competitive differentiation.
The accounting treatment is equally important - Rogers will continue to consolidate the subsidiary's financial results, meaning this transaction won't affect how investors evaluate Rogers' operational performance metrics like EBITDA and free cash flow.
The consortium's willingness to invest at this scale validates the underlying value of Rogers' network infrastructure. While the CDN$0.4 billion annual distributions represent an ongoing commitment, these payments should be more than offset by reduced interest expenses from deleveraging. The buyback provision between years 8-12 ensures Rogers can reclaim full ownership when strategically appropriate, potentially coinciding with major network evolution cycles.
Proceeds will be used to repay debt
Expects debt leverage ratio to be reduced by 0.7x following the close of the transaction
Rogers will maintain full operational control of its wireless network
TORONTO, April 04, 2025 (GLOBE NEWSWIRE) -- Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RCI) today announced it has entered into a definitive agreement with funds managed by Blackstone, backed by leading Canadian institutional investors, for a CDN
Under the terms of the transaction, Blackstone will acquire a non-controlling interest in a new Canadian subsidiary of Rogers that will own a minor part of Rogers wireless network. Rogers will maintain full operational control of its network and will include the financial results of the subsidiary in its consolidated financial statements.
“This strategic partnership demonstrates the confidence investors have in Rogers and in our world-class assets,” said Tony Staffieri, President and CEO. “With this significant investment, we are executing on our commitment to de-lever our balance sheet.”
The investor group led by Blackstone includes 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.
Repaying debt and strengthening balance sheet
Rogers intends to use the net proceeds from the transaction to repay debt.
“This transaction will strengthen the company’s investment grade balance sheet by reducing our borrowings and unlocking the unrecognized value of critical assets,” said Glenn Brandt, Chief Financial Officer. “With this transaction, Rogers will have issued an aggregate
Subsidiary equity investment
Following the transaction, Blackstone will hold a
The subsidiary is expected to distribute up to approximately CDN
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.
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.
Additional information about the transaction and the terms and conditions thereof will be available in a material change report to be filed on Rogers profile on SEDAR+ at www.sedarplus.ca.
Forward-Looking Statements
This news release includes “forward-looking information” within the meaning of applicable securities laws relating to, among other things, the anticipated effect of the transaction on our debt leverage ratio, our intended use of proceeds from the transaction, our relationship with and control over the newly-formed subsidiary, the expected equity treatment for the transaction from our credit rating agencies, the closing of the transaction on the terms described in this news release and the expected timing of the closing of the transaction. Forward-looking information may in some cases be identified by words such as “will”, “anticipates”, “expects”, “intends” and similar expressions suggesting future events or future performance.
We caution that all forward-looking information is inherently subject to change and uncertainty and that actual results may differ materially from those expressed or implied by the forward-looking information. A number of risks, uncertainties and other factors could cause actual results and events to differ materially from those expressed or implied in the forward-looking information or could cause our current objectives, strategies and intentions to change, including, but not limited to, new interpretations or accounting standards, or changes to existing interpretations and accounting standards, from accounting standards bodies, changes to the methodology, criteria or conclusions used by rating agencies in assessing or assigning equity treatment or equity credit to the transaction and the other risks described under the headings “About Forward Looking Information” and “Risks and Uncertainties Affecting our Business” in our management’s discussion and analysis for the year ended December 31, 2024. Accordingly, we warn investors to exercise caution when considering statements containing forward-looking information and that it would be unreasonable to rely on such statements as creating legal rights regarding our future results or plans. We cannot guarantee that any forward-looking information will materialize and you are cautioned not to place undue reliance on this forward-looking information. Any forward-looking information contained in this news release represent expectations as of the date of this news release and is subject to change after such date. However, we are under no obligation (and we expressly disclaim any such obligation) to update or alter any statements containing forward-looking information, the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law. All of the forward-looking information in this news release is qualified by the cautionary statements herein.
Forward-looking information is provided herein for the purpose of giving information about the transaction and its expected impact. Readers are cautioned that such information may not be appropriate for other purposes. The completion of the transaction is subject to closing conditions, termination rights and other risks and uncertainties. Accordingly, there can be no assurance that the transaction will occur, or that it will occur on the terms and conditions contemplated in this news release. The transaction could be modified, restructured or terminated. There can also be no assurance that the benefits expected to result from the transaction will be fully realized.
Other Information
Debt leverage ratio is a capital management measure. The debt leverage ratio has been adjusted in this press release to give effect to the transaction by further reducing adjusted net debt by an amount equal to the expected net proceeds of the transaction. This adjusted debt leverage ratio is a non-GAAP ratio and the further adjusted net debt, used as a component of this adjusted debt leverage ratio, is a non-GAAP financial measure. These are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other companies. For more information about these measures, see “Non-GAAP and Other Financial Measures” and “Financial Condition – Adjusted Net Debt and Debt Leverage Ratios” in our management’s discussion and analysis for the year ended December 31, 2024, which is available at www.sedarplus.ca and sec.gov.
About Rogers Communications Inc.
Rogers is Canada’s leading communications and entertainment company and its shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI). For more information, please visit rogers.com or investors.rogers.com.
For more information:
Rogers Investor Relations
investor.relations@rci.rogers.com
1-844-801-4792
Rogers Media:
media@rci.rogers.com
1-844-226-1338
FAQ
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