TELUS, Clearnet to create Canada's largest wireless company

In a bid to become Canada's largest wireless company, TELUS Corp. is offering C$6.6 billion in cash and stock for Clearnet Communications. The combination will produce the largest wireless company in Canada in terms of annual revenue, customer growth and wireless spectrum position. The transaction is a major advance in building TELUS, with more than 1.8 million customers, a license to provide coverage to 30.7 million potential customers and existing digital network coverage for more than 21 million potential customers from coast to coast.

George Cope, president and CEO of Clearnet, will assume leadership of the combined wireless entity as its president and CEO.

The offer price of C$70 per share represents a 53% premium to the closing price (C$45.80; US$31.00) of the Clearnet Class A non-voting shares on Friday, August 18, 2000, the last trading day before the transaction was announced. TELUS has entered into lock-up agreements with Clearnet shareholders holding an aggregate of more than 86% of the voting interest in Clearnet and more than 30% of the economic interest.

Two of Clearnet's major shareholders—Nextel Communications and Motorola Canada—have agreed to accept Telus shares in exchange for 100% and 75%, respectively, of the Clearnet shares they own. Also, Clearnet's board of directors, on the recommendations of an independent committee of directors, has recommended the offer to shareholders.

Clearnet brings to TELUS more than 2,600 team members with an exceptionally strong entrepreneurial culture. "Our national employee team is renowned for its talent, motivation and commitment to leading the wireless industry," said George Cope. "We look forward to joining with TELUS's experienced team of wireless professionals in the implementation of the new wireless voice, data and Internet strategy of our combined entity."

By operating its own national digital wireless network, TELUS will be able to compete more aggressively for wireless customers across Canada. The companies' wireless operations offer compatible digital PCS services based on CDMA technology. Clearnet also brings to the combined entity its Mike network, a multifunctional wireless tool aimed at the business market.

Both companies bring strategic partnerships with key U.S. wireless carriers to their combined wireless operation. Clearnet's partner Nextel Communications Inc., offers—with Nextel Partners Inc.—Mike clients coverage in 98 of the top 100 U.S. markets. TELUS has a partnership with Verizon through GTE Corp. Through this partnership, TELUS will be able to provide its cellular and PCS customers seamless, single-rate roaming across North America.

The combination will allow TELUS to compete in the wireless market on a national scale approximately three years sooner than if it had decided to build its own network. As well, the synergies in this transaction, including tax-losses carried forward, operating and revenue synergies, are estimated at approximately C$2.1 billion to C$2.4 billion. The transaction is expected to be completed in October 2000.

Edited by Ellen Jensen
Managing Editor, Wireless Networks Online