Bell & TELUS to merge within “the coming year or two”

bellusimageRumours of Bell and TELUS merging have been going on for a number of years. It started to heat up again late last year when the failed $52 billion takeover bid by the Ontario Teachers’ Pension Plan was “officially terminated. At that time Scotia Capital anylist John Henderson said “We believe Telus remains very interested in entering merger discussions”… but this was defused by himself about a month later “A new head of the Competition Bureau this month makes it less likely in our view that BCE or TELUS will consider proposing a merger in the near term”.

Bell and TELUS together control about 60% of the Canadian wireless market and with the new competition coming in a couple months, brings new “Bellus” merger rumours to the table.

Jonathan Allen, of RBC Dominion Securities Inc. has said in a report today that “Faced with cyclical and secular pressures on the top-line, we believe that a BCE-Telus merger is increasingly likely in the coming year or two as both companies look to cut costs and sustain margins. There is only so much cost cutting that can be achieved individually. The scale benefits from a merger of Bell and Telus are substantial”.

He states that together they would save over $1.2-billion annually and that if merged Telus shareholders would receive one-third of the new entity and BCE shareholders getting two-thirds.

They are both launching a new HSPA network within the next few months. A deal would make sense, but a massive undertaking that could take years to finalize.

More here from the Globe
Thanks Jeremy!