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Shaw Communications on Buying Spree

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Shaw Communications Inc. (SJR - Free Report) , a leading cable multi service operator and media company of Canada, has decided to acquire ENMAX Envision Inc., the high-speed data communications subsidiary of ENMAX Corp. Shaw will pay approximately $225 million for this deal. The transaction is expected to be financed by Shaw’s cash on hand and its existing credit facilities. The deal is expected to close soon.

ENAMX Envision has the largest fiber-optic cable network in the Calgary region of Canada. The company is a specialized large bandwidth solutions provider to several business enterprises that require dedicated Internet connections or depend on private network to connect multiple locations. Acquisition of ENMAX Envision will strengthen Shaw’s foothold in Calgary. Shaw currently has a Zacks Rank #3 (Hold).

After abandoning its wireless plan, Shaw is revamping its business model. In Jan 2013, the company entered into an agreement with Rogers Communications Inc. (RCI - Free Report) to sell its AWS spectrum holding in 2014 apart from selling Shaw’s Ontario-based cable business – Mountain Cablevision Limited. 

Moreover, Shaw will acquire Rogers’ one third interest in specialty TV Network – TVtropolis for $59 million and will negotiate with Rogers for starting certain services in Western Canada. TVtropolis together with Shaw’s Canwest will strengthen the company’s leading position in the specialty television business.

Shaw offers triple-play cable and satellite TV, Internet, and wireline phone services, whereas its main competitor Telus Corp. (TU - Free Report) offers Cable TV, Internet, wireline, and wireless services. Telus shares a national wireless network with Bell Canada, a division of  BCE Inc. (BCE - Free Report) . Its popular Optik TV, offering IPTV services, is gaining huge market traction.

In order to remain competitive Shaw is gradually expanding its Wi-Fi network. The company’s improved software user interface called “DreamGallery” is backward compatible with Shaw installed 700,000 set top boxes. Shaw has targeted complete digitalization of its network by the end of 2013.

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