Canada's Shaw sells cable network arm to Corus for $1.9B

Canadian cable operator Shaw Communications has sold its programming networks division to Corus Entertainment for $1.9 billion in cash and stock.

Under the agreement, Corus, which operates radio stations and children's TV channels in Canada, will obtain from Shaw channels including National Geographic, Food Network Canada and HGTV Canada. When the deal closes, Corus, which was spun off itself from Shaw 15 years ago, will operate 45 niche-focused channels. 

"This combination fits like a glove," Corus CEO Doug Murphy said on a conference call covered by Reuters

The move follows Shaw's announcement last month of its $1.6 billion purchase of Wind Mobile. The Calgary-based MSO said it will acquire Canada's fourth-largest mobile operator, pending approval by the Competition Bureau, along with the Ministry of Innovation, Science and Economic Development and other regulators. Shaw expects the transaction to close in the third quarter of 2016.

Upon approval of both deals, Shaw will exit the media business and become a pure-play connectivity company, offering cable TV, telephone and Internet services in Canada's western provinces and wireless in B.C., Alberta and Ontario.

Shaw serves 3.2 million residential customers and businesses and posted nearly $4 billion in revenue for the fiscal year ended Aug. 31. The move comes with Shaw's principal competitors in the Canadian telecom business, Rogers Communications and Telus, already bundling wireless service with TV video, Internet and home landline products.

"The global telecom landscape is quickly evolving towards 'mobile-first' product offerings as consumers demand ubiquitous connectivity from their service providers," said Shaw CEO Brad Shaw in a statement released at the time of the Wind announcement. "The acquisition of Wind provides Shaw with a unique platform in the wireless sector which will allow us to offer a converged network solution to our customers that leverages our full portfolio of best-in-class telecom services, including fibre, cable, WiFi, and now wireless."

For more:
- read this Financial Post story
- read this Reuters story

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