Canadian heavyweight Rogers Communications struck a CAD26 billion ($20.8 billion) deal to acquire domestic rival Shaw Communications, a tie-up pitched as accelerating the country’s 5G rollout, creating new jobs, and sparking network and technology investment.

In a statement, Rogers Communications said it had proposed a full takeover at CAD40.25 per share in cash for Shaw Communications, amounting to approximately CAD20 billion, with the remainder involving taking on debt.

The price represents an almost 70 per cent premium on Shaw Communications’ last closing price. It is not conditional on financing and it received board approval.

It will now be subject customary closing conditions, including approval from Canadian regulators, with completion expected in the first half of 2022.

Rogers Communications said the combined company would have the “scale, assets and capabilities” to deliver unprecedented connectivity, while fuelling network investments, innovation and growth in new services.

It plans to invest CAD2.5 billion in 5G networks over the next five years across Western Canada, designed to enhance consumer choice, bridge a digital divide between rural and urban areas, and accelerate rollout of the technology.

An additional CAD3 billion will go towards network, services and technology investments.

Synergies are expected to exceed $1 billion annually within two years of closing.

Rogers Communications added the combined entity was committed to offering affordable mobile plans with no overage fees, and it pledged not to increase prices for Shaw Communications’ Freedom Mobile customers for three years.

Through broadband and wireless investments, the combined entity intends to create 3,000 jobs across Western Canada, while Rogers Communications also planning to create a $1 billion fund to connect rural and remote areas.

Joe Natale, president and CEO of Rogers Communications said the country was now “at a critical inflection point where generational investments are needed to make Canada-wide 5G a reality”.