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Rogers Communication (RCI) Gets a Nod to Merge With Shaw

Rogers Communications RCI recently announced that Canada’s Federal Court of Appeal has granted it the permission to takeover Shaw Communications SJR, dismissing the arguments put forward by the Competition Bureau.

The bureau expressed its concerns over the acquisition, stating that it would result in less competition in Canada’s wireless business. But the court denied it as there was no substantial evidence to prove the lessening of competition. This brings an end to a year-long battle and gives a green signal for this $20-billion merger.

However, the deal still requires approval from Industry Minister Francois-Philippe Champagne. If granted, the deal should be get closed by Jan 31.

Rogers Communication Expected to Benefit From This Deal

Shaw Communications has shown a strong growth in its wireless business division in 2022. In the fourth quarter of fiscal 2022, the company added approximately 52,900 new wireless customers while the wireless service revenues saw  growth of 7.3% year over year.

These customers would now become a part of Rogers’ user-base, hence aiding the company’s subscriber growth even further, after it delivered a total of 448000 net wireless additions in the third quarter fiscal 2022, up 137% year over year.

Besides this, Shaw entered a partnership with Fox Corporation’s FOXA streaming service, Tubi last year to make its service available to Shaw’s seven million-plus customers.

Rogers Communication, Inc. Price and Consensus

Rogers Communication, Inc. Price and Consensus
Rogers Communication, Inc. Price and Consensus

Rogers Communication, Inc. price-consensus-chart | Rogers Communication, Inc. Quote

This would allow Shaw’s pay-TV subscribers to get access to movies and television shows, alongside Tubi Originals, such as the recently released Crooklyn, Good Wife’s Guide To Murder and more.

It is expected that the merger would allow access of these content to Roger’s subscribers as well. These would attract more users to it and level up its media business that already showed revenue growth of 12% year over year in the above discussed quarter.

The shares of Rogers, have gained 2% in the past year against the Zacks Consumer Discretionary sector, which fell by 17.8% in the same time frame.

Zack Rank & A Stock to Consider

Rogers Communication currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked stock in the same sector is Manchester United MANU, sporting a Zacks Rank #1.

Shares of Manchester United have gained 70.9% in the past year. The Zacks Consensus Estimate for earnings is pegged at a loss of 1 cent, which has been constant over the past 30 days.

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Rogers Communication, Inc. (RCI) : Free Stock Analysis Report

Shaw Communications Inc. (SJR) : Free Stock Analysis Report

Manchester United Ltd. (MANU) : Free Stock Analysis Report

Fox Corporation (FOXA) : Free Stock Analysis Report

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