TELUS to Acquire Remaining TELUS Digital Shares in $539 Million Deal

TELUS Corporation TU has announced a definitive agreement to acquire all outstanding shares of TELUS International (Cda) Inc. (TIXT), commonly known as TELUS Digital, that it does not already own. The deal values each share at $4.50, representing a total consideration of approximately $539 million. The transaction has been unanimously recommended by TELUS Digital’s Special Committee of independent directors and unanimously approved by its full board, with interested directors abstaining.

The deal offers shareholders three payment options: $4.50 in cash per share, 0.273 of a TELUS common share, or a combination of $2.25 in cash and 0.136 of a TELUS share. To maintain balance, no more than 25% of the total consideration will be paid in shares. Notably, the agreed price reflects a 52% premium over TELUS Digital’s unaffected closing share price of $2.96 on June 11, 2025, the day before TELUS announced its initial $3.40 per share proposal.

Management emphasized that bringing TELUS Digital fully under the TELUS umbrella aligns with the company’s broader strategy. TU stated that closer integration will strengthen digital customer experience solutions, accelerate AI capabilities and drive SaaS transformation across its core businesses, including telecommunications, TELUS Health and TELUS Agriculture & Consumer Goods. This initiative boosts the company’s ability to expand internationally across fintech, gaming, media and healthcare, while ensuring substantial value creation for shareholders.

TELUS Corporation Price and Consensus

TELUS Corporation price-consensus-chart | TELUS Corporation Quote

The acquisition is supported by EQT, TELUS Digital’s largest minority shareholder, which controls about 31% of the subordinate voting shares and 7.5% of multiple voting shares. EQT has agreed to convert its multiple voting shares into subordinate shares, ultimately holding nearly 37.7% of that class, and has committed to vote in favor of the deal. TELUS already owns about 86.9% of TELUS Digital’s voting power.

The transaction values TELUS Digital at $2.9 billion and is subject to shareholder, court and regulatory approvals. A special shareholder meeting has been scheduled for Oct. 27, 2025, with TELUS Digital shareholders of record on Sept. 12 eligible to vote. If approved, the transaction is expected to close in the fourth quarter of 2025, after which TELUS Digital’s shares will be delisted. Upon closing, TELUS will own 100% of TELUS Digital, further strengthening its position in digital transformation, AI and global innovation across multiple industries.

In second-quarter 2025, TELUS Digital's operating revenues (from contracts with customers) increased 8%, driven by a stronger U.S. dollar and euro against the Canadian dollar, boosting TELUS Digital’s results. Growth in services to existing clients and the addition of new clients also aided it. TELUS Digital's operating revenues and other income grew 3%. The segment’s adjusted EBITDA decreased 25.8% from the year-ago quarter.

However, TELUS continued to face pressure on its mobile average revenue per user (ARPU), underscoring persistent challenges in monetizing its subscriber base. In addition, frequent acquisitions may pose risks to the company’s growth and profitability. Stiff competition and a high debt burden also remain key concerns.

TU’s Zacks Rank & Stock Price Performance

TELUS currently carries a Zacks Rank #4 (Sell). Shares of the company have inched up 6.2% in the past six months compared with the Zacks Diversified Communication Services industry’s growth of 18.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider From the Utilities Space

Some better-ranked stocks from the broader utilities space are Fortis Inc. FTS, NextEra Energy, Inc. NEE and Atmos Energy Corporation ATO. FTS, NEE and ATO carry a Zacks Rank #2 (Buy).

Fortis’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 4.47%. In the last reported quarter, FTS delivered an earnings surprise of 7.84%. The company’s long-term earnings growth rate is 5.1%. Its shares have gained 10.6% in the past year.

NextEra’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.51%. In the last reported quarter, NEE delivered an earnings surprise of 2.94%. The company’s long-term earnings growth rate is 7.9%. Its shares have gained 2.6% in the past six months.

Atmos Energy’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 1.67%. The company’s long-term earnings growth rate is 7.3%. Its shares have gained 25.1% in the past year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research