VANCOUVER – TELUS confirmed Thursday it has entered into a mutual non-disclosure and standstill agreement and non-exclusive discussions with BCE about merging.
“TELUS believes the combination of the two businesses would represent a compelling strategic and financial opportunity for all BCE and TELUS stakeholders. It would be an all Canadian solution for both immediate and long-term value creation, whilst ensuring a vibrant player continues in this increasingly competitive industry,” said TELUS President and CEO Darren Entwistle. “TELUS has a unique opportunity to create a truly national Canadian enterprise with the requisite balance sheet strength as well as scale and scope to continue TELUS’ development as a global leader in the deployment of state of the art technology and innovative new services for customers.”
TELUS’ possible hook-up with BCE was reported by cartt.ca earlier this week.
TELUS noted in a media release issued Thursday that a combined TELUS/BCE would result in “significant” operating synergies, retained investment grade credit ratings thereby retaining financial strength to invest in long-term growth, continued access to leading edge technology, current BCE shareholders being able to participate in ongoing value creation on a largely tax deferred rollover basis, and the establishment of a truly national telecommunications company, similar to British Telecom.
But TELUS warned that there were no assurances that the two companies would continue discussions or enter into any agreement, “given the accelerated process that BCE has adopted.”
TELUS entered the talks as a result of a strategic review process announced by BCE on April 17.
Some of the barriers to finalizing a potential deal include the approvals required to be obtained by TELUS and BCE from shareholders, regulatory and other agencies and bodies may not be obtained in a timely manner or at all, and costs or difficulties related to the integration of BCE’s and TELUS’ operations may be greater than expected.
