Rogers pledges $3 billion Quebec investment
Rogers Communications Inc. said Friday it will invest up to $3 billion in Quebec if the telecom giant is successful in acquiring rival Cogeco's Canadian assets.
The Toronto-based company unveiled a series of measures aimed at sweetening a deal to buy Cogeco's internet and cable television business after getting rebuffed by the company's largest shareholder earlier this month.
Rogers and Altice USA Inc. delivered an unsolicited proposal to buy Cogeco, with the U.S. company offering $10.3 billion for the company and would then sell the Canadian assets to Rogers for a cash consideration of $3.4 billion.
"Rogers is deeply committed to the future of innovation and the knowledge economy in Quebec. We would be honoured to help enhance the customer experience and bring new investments including 5G that will fundamentally reshape the economic landscape of Quebec," said Joe Natale, Rogers' president and chief executive officer, in a statement.
Rogers said it would spend $3 billion in Quebec, where Cogeco is based, over the next five years. Half of that investment would be earmarked for various network investments including a broad rollout of 5G wireless technology infrastructure as well as expanding connectivity to rural communities. Rogers added it would ensure that the combined company would employ 5,000 people while keeping Cogeco's headquarters and management in the province, and would support several community partnerships.
A Cogeco spokesperson told BNN Bloomberg in an email that Rogers is free to make its investment in Quebec, but it doesn't need to buy Cogeco to do so.
"If Rogers fails to invest, their competitors will take away its mobile customers, regardless of 5G," the spokesperson said. “As far as Cogeco is concerned, the company remains focused on executing its profitable growth strategy, investing in its state of the art broadband networks and offering leading edge services to its customers.”
Earlier this month, Cogeco's independent directors rejected Rogers and Altice's takeover offer, with Gestion Audem, Cogeco's controlling shareholder and the Audet family’s investment vehicle, stating that it is not interested in selling its shares.
Analysts have also cast doubt on whether a deal could ever materialize given the Audet family's control of the business.