Canadian mobile operator Rogers Communications has agreed to an equity deal with Blackstone worth CA$7 billion (US$4.9bn).

As part of the agreement, Blackstone will acquire a non-controlling interest in a new Canadian subsidiary of Rogers that will own a minor part of Rogers' wireless network.

Rogers confirmed that it will "maintain full operational control of its network" and will include the financial results of the subsidiary in its consolidated financial statements.  

Blackstone will hold a 49.9 percent equity interest in the new subsidiary, while the remainder will be owned by Rogers.

It was reported in November that Blackstone was closing in on an agreement to snap up the stake in Rogers' wireless backhaul network.

The investor group led by Blackstone includes the Canada Pension Plan Investment Board (CPP Investments), Caisse de dépôt et placement du Québec, the Public Sector Pension Investment Board (PSP Investments), and British Columbia Investment Management Corporation.

“This strategic partnership demonstrates the confidence investors have in Rogers and in our world-class assets,” said Tony Staffieri, Rogers president and CEO. “With this significant investment, we are executing on our commitment to de-lever our balance sheet.”

Rogers said in its announcement that it will use the net proceeds from the transaction to repay debt. It comes after its acquisition of Shaw Communications for C$20 billion (US$14bn), which went through in March 2023.

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

“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 one turn.”

The company added that the subsidiary is expected to distribute up to approximately CA$400 million (US$280m) each year to Blackstone for the first five years post-closing.

The Canadian telco's average capital cost through to the end of the period for purchase is expected to be seven percent per annum.

At present, Rogers operates 4G and 5G cell sites from roughly 11,000 towers across Canada.