TELUS Corporation to Acquire Remaining Stake in TELUS Digital for US$539 Million
## TELUS Finalizes Agreement to Acquire TELUS Digital
**TELUS Corporation** (TSX: **T**, NYSE: **TU**) and **TELUS International (Cda) Inc.** (NYSE & TSX: **TIXT**) announced a definitive agreement for **TELUS** to acquire all outstanding multiple voting shares and subordinate voting shares of **TELUS Digital** not currently owned by **TELUS**. The transaction is valued at **US$4.50 per share**, reflecting an aggregate consideration of **US$539 million** for the remaining equity. This agreement follows extensive negotiations that commenced with an initial non-binding indication of interest from **TELUS** on June 11, 2025. The independent Special Committee of **TELUS Digital's** board of directors, alongside the full Board (with interested directors abstaining), has unanimously recommended that shareholders vote in favor of the Arrangement.
## Premium Valuation for TELUS Digital Shareholders
The agreed-upon price of **US$4.50 per share** offers a significant premium to **TELUS Digital's** minority shareholders. This represents a **52.0% premium** over the unaffected closing price of **US$2.96** per subordinate voting share on the New York Stock Exchange (**NYSE**) on June 11, 2025, the trading day prior to **TELUS's** initial proposal. Furthermore, the offer marks a **62.6% premium** over the 30-day volume-weighted unaffected average price of **TELUS Digital** subordinate voting shares on the **NYSE** prior to June 12, 2025, and a **16.0% premium** over the closing price on August 29, 2025. The current offer also constitutes a **32.4% increase** from **TELUS's** initial proposal of **US$3.40** per share.
Shareholders of **TELUS Digital** will have several consideration options: receiving **US$4.50** in cash, 0.273 of a **TELUS** common share, or a combination of **US$2.25** in cash and 0.136 of a **TELUS** common share. Shareholder elections for options involving **TELUS** common shares will be subject to proration, ensuring that the aggregate consideration includes no more than 25% in **TELUS** common shares.
## Strategic Alignment and Growth Drivers
**TELUS Corporation's** acquisition of **TELUS Digital** is a strategic move designed to bolster its **Artificial Intelligence (AI)** and **Software-as-a-Service (SaaS)** capabilities across its diverse business lines. **Darren Entwistle**, President and CEO of **TELUS**, emphasized the rationale:
> "Closer operational proximity between TELUS and TELUS Digital will enable enhanced AI capabilities and SaaS transformation across all lines of our business, including telecommunications, TELUS Health and TELUS Agriculture & Consumer Goods, driving positive outcomes for the customers we serve on a global basis."
This integration is expected to accelerate **TELUS's** global growth in key verticals, including financial technology, gaming and technology, communications and media, and health. The move is intended to leverage **TELUS Digital's** expertise in digital customer experience solutions and **AI** innovations to drive operational synergies and long-term value creation.
## TELUS Digital's Financial Performance and Valuation Context
While the acquisition price reflects a significant premium, **TELUS Digital's** recent financial performance has presented challenges. In the second quarter of 2025, the company reported a net loss of **$272 million**, primarily attributed to a **$224 million** non-cash goodwill impairment charge. Despite this, **TELUS Digital** recorded a **7% year-over-year revenue growth**, reaching **$699 million** in Q2 2025. Adjusted EBITDA, however, saw a **38% decline** year-over-year, settling at **$94 million** for the same period. The trailing twelve-month revenue stood at **$2.72 billion**, with a net loss margin expanding to **21.7%** in the first half of 2025 from a 1.9% profit margin in the prior-year period. As of September 2, 2025, **TELUS Digital** had a market capitalization of **$1.25 billion**. The acquisition price, despite these recent losses, underscores **TELUS Corporation's** confidence in **TELUS Digital's AI** and **SaaS** capabilities and its long-term strategic value rather than its current earnings trajectory.
## Path to Transaction Completion and Future Outlook
The transaction is subject to shareholder approval at a Special Meeting scheduled for October 27, 2025. For approval, the Arrangement requires at least two-thirds (66⅔%) of votes cast by holders of subordinate voting shares and multiple voting shares (voting together as a single class) and a simple majority of votes cast by holders of subordinate voting shares (excluding **TELUS** and its affiliates). **EQT**, **TELUS Digital's** largest minority shareholder, holding approximately 37.7% of the outstanding subordinate voting shares post-conversion, has agreed to vote in favor of the transaction. The record date for shareholders entitled to vote was September 12, 2025, with the proxy voting deadline set for October 23, 2025. Subject to court approval, regulatory approvals, and other customary closing conditions, the acquisition is anticipated to close in the fourth quarter of 2025. Following the completion of the transaction, **TELUS Digital** subordinate voting shares are expected to be delisted from the **NYSE** and the Toronto Stock Exchange (**TSX**), ceasing to be a reporting issuer in Canada. This integration is expected to position **TELUS** to further enhance its competitive standing and market share in the rapidly evolving digital services landscape.
