Telus Corp. (NYSE: TU; Toronto: T), Canada's largest competitive carrier, is in talks to buy national incumbent BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), the carriers said this morning.

Such a move wouldn't come cheap. Bell Canada has a market capitalization of nearly $30 billion, based on its Wednesday closing price of $36.77 on the New York Stock Exchange (NYSE) . In pre-market trading this morning the stock was up more than 1 percent to $37.18.

Bell Canada's stock has been on the rise recently, following news of a number of talks with potential buyers. (See BCE Enters More Talks, BCE in Privatization Talks, and Bell Canada Denies Takeover Rumors.)

Telus, which has a market cap of about $20 billion, "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." Telus's share price closed Wednesday at $60.73 and slipped slightly in pre-market trading this morning to $60.60 following the news announcement.

Combined, the two operators, which both have fixed and wireless assets, generated C$26.4 billion (US$24.6 billion) in 2006 -- Bell Canada reported C$17.7 billion and Telus C$8.7 billion.

Merging the two operators would, according to Telus, create a "truly national telecommunications company, similar to other G8, European and Commonwealth countries (e.g. British Telecom, France Telecom, Deutsche Telekom, NTT, Telecom Italia) in an industry critical to national sovereignty."

It would also realize "significant operating synergies" that would benefit investors.

Telus noted, though, that "there is no assurance that Telus and BCE will continue discussions or enter into any agreement to proceed with any transaction."

— Ray Le Maistre, International News Editor, Light Reading