Rogers Communications to Buy Groupe Videotron for $3.4 Billion

Rogers Communications Inc., Canada’s No. 1 cable operator, agreed to buy Groupe Videotron, the third-biggest, for $3.4 billion to prepare for expected U.S. competition.

Rogers will add Videotron’s 1.6 million subscribers, for a total of 3.7 million customers. It is paying a 48% premium over Videotron’s closing share price on Jan. 28, when shares started rising on takeover speculation. Rogers will pay 0.925 Class B nonvoting share, or $28.05, for each of Videotron’s 120 million shares, based on Monday’s closing price. Shares closed up 35 cents at $28.05 on the Toronto Stock Exchange.

Canadian cable operators are catching up with last year’s consolidation in the U.S. to compete with rivals such as AT&T; Corp., soon to be the biggest U.S. cable operator, seek to expand globally.