Rogers Cashes in on $7 Billion Network Deal, Backers Include Pension Funds

Rogers is getting a $7 billion cash boost from Blackstone and a group of major Canadian pension investors. In exchange, these investors are buying a 49.9% stake in a new Rogers-owned company that will hold a small portion of its wireless infrastructure—basically, part of the system that helps data travel between cell towers.

It was reported back in October that Rogers was trying to finalize a network sale to get cash to pay down debt. Reports claimed major New York-based investment firm Blackstone was in talks to be the purchaser and today Rogers confirmed this.

Rogers will still fully control its network and continue to manage operations. The new company is mostly a financial move to raise money.

The money raised will be used to pay down debt, something Rogers has been focused on since taking on big loans, including from its recent $26 billion takeover of Shaw. By selling part of its assets to investors, Rogers hopes to reduce its debt load and improve its credit ratings.

Blackstone is leading the deal, with other backers include Canada Pension Plan Investment Board (CPP Investments), Quebec’s CDPQ, the Public Sector Pension Investment Board, and BC’s Investment Management Corporation—all big players that manage retirement savings for Canadians.

Last October, Rogers CEO Tony Staffieri called this financing deal “the first of its kind in Canada.” The move follows what other U.S. telecoms have done in the past, such as T-Mobile, which now leases its network gear instead of owning it outright.

Simply put, here’s how the deal works in a nutshell according to Rogers in its announcement on Friday:

• Rogers keeps a slight majority control (50.1%) and 80% of the voting rights.
• Blackstone gets 49.9% ownership and 20% of the votes.
• Rogers can buy back Blackstone’s share sometime between 8 to 12 years from now.
• Blackstone is expected to receive around $400 million per year for the first five years.

The deal still needs regulatory approval but is expected to close in mid-2025.

Debt for Rogers continues to stick around, as this week the company announced a renewed NHL TV rights deal, that will cost it $11 billion over 12 years.

Last week, we heard about Telus looking to pull off a similar move of selling part of its nationwide cellphone tower network, to raise cash and pay down debt. Now that this Rogers deal is done, it seems we may see more similar deals take place from its rivals as well.