News
Canadian company repositions itself as a connectivity provider, while retaining a stake in enlarged media group.
Shaw Communications on Wednesday announced that it has agreed to sell its media division to TV and radio group Corus Entertainment for C$2.65 billion (€1.7 billion) in cash and stock, a deal that repositions the company as a communications services provider while leaving it with a stake in the enlarged media entity.
The Canadian company said it expects to realise net proceeds of C$1.8 billion from the transaction that it will use to fund its planned acquisition of Wind Mobile.
"With the previously announced acquisition of Wind and sale of Shaw Media, Shaw will be focused on delivering consumer and small business broadband communications supported by its best-in-class wireline, WiFi and wireless infrastructure," Shaw CEO David Shaw said, in a statement.
Shaw agreed to pay C$1.6 billion for Wind Mobile last month.
On completion of the deal, Shaw will receive around C$1.85 billion in cash and 71 million class B non-voting shares in Corus. It will ultimately hold around 39% of Corus’ total issued equity.
"This transaction represents a significant milestone for Shaw, firmly positioning the company as a leading pure-play connectivity provider with an attractive growth profile while allowing Shaw to participate in the significant upside potential resulting from the combination of Shaw Media and Corus," Shaw said.
Shaw Media operates Canadian broadcaster Global Television Network and a further 19 TV channels, including National Geographic, Food Network and BBC Canada.
Corus Entertainment, which was created from media assets originally owned by Shaw and was spun off as a publicly-traded entity in 1999, owns a large number of TV and radio brands, as well as content companies including Nelvana and children’s publishing company Kids Can Press.
"This acquisition represents a transformational transaction for Corus that positions the combined business as one of Canada’s leading media and content companies with significantly enhanced scale and growth prospects going forward," said Corus CEO Doug Murphy.
The deal is subject to the approval of Corus shareholders, as well as various closing conditions and regulatory approvals, including the go-ahead from the Canadian Radio-television and Telecommunications Commission.
The companies expect it to close in its fiscal third quarter, which runs until the end of May.
