Rogers Communications Inc. ( RCIAF ) said on Friday it has entered into an agreement to receive a 7 billion Canadian dollars (~$5 billion) equity investment from funds managed by Blackstone Inc ( BX ) , supported by several Canadian institutional investors.

The deal gives Blackstone a minority stake in a newly formed Rogers subsidiary tied to a portion of its wireless infrastructure.

Blackstone is backed by Canadian institutional investors, including CPP Investments, Caisse de dépôt et placement du Québec, PSP Investments, and British Columbia Investment Management Corporation.

Blackstone will hold a 49.9% equity interest in the new entity, while Rogers retains 50.1% and full operational control.

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“This transaction will strengthen the company’s investment grade balance sheet by reducing our borrowings and unlocking the unrecognized value of critical assets,” said Rogers CEO Glenn Brandt.

“With this transaction, Rogers will have issued an aggregate $9 billion of equity-valued capital since year-end, which is expected to reduce leverage by almost 1 turn.”

The newly formed entity will hold a partial interest in Rogers’ wireless backhaul transport infrastructure, with a structure allowing Rogers to buy back Blackstone’s stake between the eighth and twelfth years following the deal’s closure. Blackstone will maintain a 20% voting right in the subsidiary.

The investment is expected to yield annual distributions of up to C$400 million to Blackstone during the first five years. Rogers’ average capital cost for the deal through the repurchase period is projected to be approximately 7% annually.

The investment will be recorded as equity in Rogers’ financial statements and is likely to be classified similarly by major credit rating agencies, including Moody’s, S&P Global Ratings, and DBRS Limited.

Rogers intends to use the transaction net proceeds to repay debt. The deal’s completion is targeted for the second quarter of 2025, pending regulatory approvals and closing conditions.

Price Action: RCI shares traded higher by 1.65% at $26.50 in premarket at last check Friday.

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