Rogers-Shaw: The C$26bn Merger That Reshaped Canadian Telecom

The Rogers-Shaw merger was the biggest bet in Canadian telecom history, and three years on it has reshaped the industry in ways its architects did not plan: a stronger fourth carrier in Quebecor, a debt-laden Rogers, and a price war that has forced its rivals to slash dividends. This article follows the deal from the March 2021 announcement through the regulatory fight, the October 2021 battle for control of Rogers itself, the forced divestiture of Freedom Mobile, the debt load and the asset sales used to manage it, the 2025 and 2026 results of the Big Three, and Rogers’ pivot into sports ownership through MLSE. It is part of the Canada Company Stories hub.

Why did Rogers want to buy Shaw?

Rogers wanted Shaw because it offered the one thing Rogers lacked: a cable and internet network in Western Canada. Rogers was the dominant cable operator in Ontario and the Atlantic provinces and the largest wireless carrier nationally, but it had no wireline presence west of Ontario. Shaw, founded by JR Shaw in 1966 and run by his son Brad Shaw, was the cable incumbent in British Columbia, Alberta and parts of Saskatchewan and Manitoba, with about C$5.5bn of revenue in 2021 and a wireless challenger, Freedom Mobile, that it had bought out of bankruptcy as Wind Mobile.

The deal was announced on 15 March 2021 at about C$20bn in equity plus roughly C$6bn of assumed debt, or C$26bn in total, a 70% premium to Shaw’s share price. Rogers promised C$1bn of annual synergies, a national fibre and 5G network, 3,000 new jobs in the West and a C$2.5bn investment in Western networks. The Shaw family agreed to take part of its payment in Rogers shares and to join the Rogers board.

The industrial logic was that Canada’s telecom market was converging on three national players, Bell, Telus and Rogers, each needing both wireless and wireline across the country to compete for household bundles. Bell and Telus already had that through their legacy telephone networks; Rogers did not. Shaw, with an ageing controlling family and a wireless business that needed heavy spectrum investment it could not afford, was the only available partner.

The competitive logic was the problem. Freedom Mobile, with about 6% of Canadian wireless subscribers, was the most aggressive price competitor in Ontario, Alberta and British Columbia, and it was exactly the kind of fourth carrier that federal policy had spent fifteen years trying to create. A Rogers purchase would absorb it into the incumbent it was built to challenge.

How did the Rogers family fight over control in 2021?

The Rogers family fought over control because the chairman, Edward Rogers, tried to replace the chief executive in the middle of the Shaw approval process and his mother and sisters tried to stop him. In September 2021 Edward Rogers, son of founder Ted Rogers and chair of the Rogers Control Trust that holds 97.5% of the company’s voting shares, moved to replace chief executive Joe Natale with chief financial officer Tony Staffieri. The plan leaked, reportedly after a mistaken phone call, and the board, including Edward’s mother Loretta Rogers and sisters Martha Rogers and Melinda Rogers-Hixon, rejected it.

On 21 October 2021 the board removed Edward Rogers as chairman. The next day, using his authority as chair of the control trust, he passed a written shareholder resolution replacing five independent directors with his own nominees, and on 24 October the reconstituted board reinstated him as chairman. The ousted directors and the other family members called the move invalid, and the dispute went to the Supreme Court of British Columbia, where Rogers is incorporated.

On 5 November 2021 Justice Shelley Fitzpatrick ruled that Edward Rogers’ actions were valid and enforceable under British Columbia corporate law. Natale left in November 2021, Staffieri became interim and then permanent chief executive in January 2022, and Edward Rogers was named executive chairman in August 2024. The episode exposed how a dual-class share structure lets a single family trust override an independent board, and did so while the company was asking regulators to approve the largest deal in its history.

The governance consequences have been durable. Loretta Rogers died in 2022, the dissenting directors were gone and the board has since been aligned with the executive chairman. Investors in Rogers’ widely held non-voting shares own the economics but not the control, a structure shared by several of the family dynasties examined in the Thomson family story and across the Canadian corporate landscape.

How did the Competition Bureau try to block the deal?

The Competition Bureau tried to block the deal on the grounds that it would eliminate Rogers’ closest wireless rival. The CRTC, which reviews only the broadcasting assets, approved the merger on 24 March 2022 with conditions. The Bureau, led by commissioner Matthew Boswell, applied to the Competition Tribunal on 9 May 2022 to stop the transaction entirely, arguing that Freedom Mobile had driven down prices and that no divestiture could replicate its competitive effect.

Rogers and Shaw answered by agreeing to sell Freedom. On 17 June 2022 they announced that Quebecor’s Vidéotron would buy Freedom’s wireless and internet customers, spectrum, infrastructure and retail stores for C$2.85bn. The Bureau argued the remedy was inadequate because Freedom would lose the Shaw cable network that supported it. Industry minister François-Philippe Champagne said in October 2022 that he would not approve the deal as proposed and set his own conditions, including that Vidéotron hold the Freedom spectrum for at least ten years and offer prices comparable to those in Quebec.

The Tribunal heard the case in November and December 2022 and dismissed the Bureau’s application at the end of December, finding that the merger with the Freedom divestiture was unlikely to substantially lessen competition. The Federal Court of Appeal rejected the Bureau’s appeal on 24 January 2023, and the Bureau was ordered to pay costs. Champagne gave final approval on 31 March 2023 with 21 enforceable conditions, including the 3,000 Western jobs, network investments, the 20% price undertaking from Vidéotron and penalties of up to C$1bn for Rogers and C$200m for Vidéotron if commitments were missed. The deal closed on 3 April 2023.

The Bureau’s defeat prompted changes to the Competition Act in 2023 and 2024 that lowered the bar for blocking mergers, removed the efficiencies defence and strengthened the commissioner’s powers. In that sense the Bureau lost the case and won the war; the next large Canadian telecom merger will face a harder test.

What became of Freedom Mobile under Quebecor?

Freedom Mobile became the national fourth carrier that policy had wanted, under a Quebec owner with the cash flow to support it. Vidéotron, controlled by Pierre Karl Péladeau’s Quebecor, took over Freedom’s roughly 2.29 million subscribers on 3 April 2023 and immediately began using it to expand beyond Quebec for the first time. Freedom launched 5G in Toronto, Vancouver, Calgary and Edmonton in July 2023, began deploying 3,500 MHz spectrum in 2024, entered Manitoba as a mobile virtual network operator in May 2024, and added resold home internet and television to become a three-product provider.

The commitments are binding. Vidéotron must keep Freedom’s plans at least 20% cheaper than the incumbents’ in British Columbia, Alberta and Ontario for ten years, hold existing customers’ prices for five years, invest more than C$150m in the network, and bring 5G to 90% of customers within two years, with up to C$200m of damages for non-compliance. Péladeau, who had said in May 2022 that he would buy Freedom if regulators forced a sale, has framed the expansion as bringing Quebec-style pricing to the rest of Canada.

The effect on the market has been exactly what the Bureau predicted Freedom could achieve under the right owner, and what it feared would be lost. Freedom’s aggressive pricing, combined with regulatory pressure and slowing immigration-driven subscriber growth, pushed the Big Three into a promotional war through 2024 and 2025. Mobile phone average revenue per user fell at all three: Rogers’ monthly ARPU dropped from C$57.98 in 2024 to C$56.42 in 2025 and C$54.25 in the second quarter of 2026; Bell’s blended ARPU fell 2.3% to C$56.30 in that quarter; Telus’s fell to C$56.36.

For Quebecor the deal has been transformative, turning a regional cable company into a national player. For consumers it has delivered the price competition the merger was supposed to destroy, which is why the Freedom sale is now cited as a model remedy. The dynamics of a controlling family building a national business from a Quebec base are examined further in the Desmarais and Power Corporation story.

How large is the debt Rogers took on, and how is it managing it?

Rogers took on more than C$20bn of debt to fund the Shaw purchase, and its leverage ratio climbed above five times adjusted EBITDA on closing, the highest among major North American carriers. Management committed to bring the ratio down to the mid-threes within three years, and has used three tools: cash flow, asset sales and structured equity.

The largest single step was the network transaction. In 2025 Rogers sold a 49.9% non-controlling interest in Backhaul Network Services Inc., a subsidiary that owns a minor part of its wireless backhaul network, to funds managed by Blackstone for US$4.85bn, about C$6.7bn, with Canadian pension funds participating. The deal closed on 20 June 2025 and was treated as equity for leverage purposes, cutting the ratio by roughly a full turn. Critics noted that Rogers must pay the investors a return from network cash flows and retains an option to buy the stake back, so the economics resemble expensive debt.

The results have been steady rather than spectacular. Debt leverage was 4.5 times at the end of 2024, 4.0 times at the end of 2025 (3.9 times pro forma for MLSE’s earnings) and 3.8 times at 30 June 2026. In September 2026 Rogers issued US$1bn of subordinated notes at 7.15% and 7.40% and C$600m at 6.00%, all due 2057, to refinance hybrid notes from 2021 and 2022. Capital expenditure has been cut hard, with capital intensity at 12.4% in the second quarter of 2026, the lowest since 2008, which supports free cash flow guidance of C$4.1bn to C$4.3bn for 2026 but raises questions about network investment.

What do Rogers’ 2025 and 2026 results show?

Rogers’ results show a company growing slowly, generating strong cash and reporting wild swings in net income because of accounting for its sports assets. Full-year 2025 revenue was C$21.71bn, up 5%, with service revenue of C$19.10bn, up 6%; adjusted EBITDA was C$9.82bn, up 2%; and free cash flow was C$3.36bn, up 10%. Net income was C$6.91bn, but that included a roughly C$5bn non-cash gain from remeasuring Rogers’ existing MLSE stake when it took control. Postpaid mobile phone net additions fell to 145,000 from 380,000 in 2024 as immigration slowed and competition intensified.

The second quarter of 2026, reported on 22 July, showed total revenue of C$5.62bn, up 8%, service revenue of C$5.06bn, adjusted EBITDA of C$2.44bn, up 3%, and free cash flow of C$982m, up 6%. Media revenue rose 53% to C$1.2bn, mostly from consolidating MLSE. Wireless and cable adjusted EBITDA each grew 1%; postpaid net additions were 22,000, postpaid churn improved to 0.94%, and retail internet additions were 17,000. The company reported a net loss of C$665m because the liability for the put option held by MLSE’s minority owner was revalued from C$3.3bn to C$4.35bn, a C$1.03bn non-cash charge.

Rogers has reaffirmed 2026 guidance of 3% to 5% service revenue growth, 1% to 3% adjusted EBITDA growth, capital expenditure of C$2.5bn to C$2.7bn and free cash flow of C$4.1bn to C$4.3bn. Third-quarter results are due on 23 October 2026. The company’s 12.2 million mobile phone subscribers, 4.5 million retail internet customers and roughly 25,000 employees make it the largest wireless and cable operator in Canada.

How are Bell and Telus coping with the new market?

Bell and Telus are coping by cutting dividends, selling assets and looking for growth outside Canadian telecom. BCE, run by Mirko Bibic, cut its annualised dividend by 56% to C$1.75 in May 2025, the first reduction in its modern history, after years of paying out more than it earned. It sold its 37.5% stake in MLSE to Rogers for C$4.7bn, completed the C$5bn purchase of Ziply Fiber in the US Pacific Northwest on 1 August 2025, and has built a Bell AI Fabric data-centre business, with a 300 MW facility in Saskatchewan and partnerships with Cohere and Cisco. In the second quarter of 2026 Bell CTS Canada revenue fell 4.0% while the new US segment and Bell Media grew.

Telus went further and later. Darren Entwistle, chief executive since 2000, handed over to former CIBC chief executive Victor Dodig in July 2026. Within weeks Telus reported a C$1.8bn second-quarter net loss after a C$2.1bn impairment of Telus Digital, which it had taken private in October 2025 for US$539m, and cut its quarterly dividend by 55% to C$0.1875, saving about C$2.7bn through 2028 to bring leverage from 3.5 times to about 3.0 times. Guidance for 2026 was cut to flat-to-declining service revenue and adjusted EBITDA down 2% to 4%. The Telus Health business, examined in the Telus Health and private medicine story, remains a growth area with revenue up 4% to C$533m in the quarter.

The common thread is that the Canadian wireless business, long one of the most profitable in the world, has stopped growing. Immigration-driven subscriber growth slowed sharply from 2024, Freedom’s price commitments anchor the market, and regulatory decisions on wholesale fibre access have pressured wireline margins. Rogers’ advantage is that it already cut costs through the Shaw integration, is not dependent on dividend growth to support its shares and has a media business that is now large enough to matter.

Why did Rogers buy all of Maple Leaf Sports & Entertainment?

Rogers bought all of MLSE because sports content is the one asset in Canadian media whose value is rising and because the Shaw integration freed it to think beyond connectivity. MLSE owns the Toronto Maple Leafs, the Toronto Raptors, Toronto FC, the Argonauts, their minor-league affiliates, Scotiabank Arena and a stake in Maple Leaf Square. Rogers already owned the Toronto Blue Jays outright and held the national NHL broadcast rights, and the MLSE purchase makes it the owner of almost every major professional team in Canada’s largest city.

The first step was agreed in September 2024 and completed on 1 July 2025: Rogers paid Bell C$4.7bn for its indirect 37.5% stake, taking control with 75% and valuing MLSE at about C$12.5bn. On 6 July 2026 it agreed to buy the remaining 25% from Larry Tanenbaum’s Kilmer Sports for C$4.35bn in cash, and that transaction completed on 1 October 2026, giving Rogers 100%. The combined price of about C$9.05bn implies the business has been revalued to roughly C$17.4bn in two years.

Rogers plans to create a “Rogers Sports” unit combining MLSE, the Blue Jays and its sports media rights and to sell a minority stake to outside investors within a year of the Kilmer closing, which would recover part of the capital and crystallise a valuation. It has also restructured its NHL rights, sublicensing at least 26 national Wednesday games to Amazon’s Prime Video for 12 years and up to 350 French-language games a season to Quebecor, its former adversary in the Freedom fight and now a partner. Media revenue grew 53% in the second quarter of 2026 with organic growth of 13%.

What can founders and investors learn from Rogers-Shaw?

The first lesson is that regulatory remedies can create the competitor you were trying to remove. Rogers spent two years and considerable political capital to buy Shaw, and the price was handing Freedom Mobile to the one buyer, Quebecor, with the cash and the motive to turn it into a national discounter. The merger succeeded as a transaction and failed as a strategy to reduce competition, which is the best possible outcome for consumers and a sobering one for acquirers.

The second lesson is that governance determines who absorbs the risk. Rogers’ dual-class structure allowed Edward Rogers to replace the board and the chief executive in the middle of the deal and the courts upheld it. Public shareholders in the non-voting shares had no say and have since watched the company pile sports assets onto an already stretched balance sheet. Investors in family-controlled Canadian companies, from Rogers to the grocery and retail dynasties, should price that lack of control, as the Loblaw and Weston story shows in another sector.

The third lesson concerns capital structure. Rogers chose to keep its dividend and sell minority stakes in assets; Bell and Telus chose to cut dividends and sell whole businesses. Three years on, Rogers has the highest leverage but the most stable share count and payout, while its rivals have reset expectations and will deleverage faster. Which approach wins depends on whether Canadian wireless pricing stabilises, and that depends in part on policy decisions in Ottawa. The regulatory and technology dimensions of the sector are picked up in the Cohere and AI sovereignty story, where Bell and Telus are now betting on data centres, and in the Shopify story, where a very different kind of Canadian technology company has grown without any of these constraints.

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