In a move to refocus on its core telecommunications business, BCE Inc., Canada's largest telecommunications company, has agreed to sell its stake in Canadian IT service provider CGI Group Inc.
Under the agreement, BCE will sell its stake in CGI in two phases, beginning with 100 million shares, worth C$859.2 million (US$741.6 million) and the remaining 28.3 million shares after a 120-day standstill period, BCE announced Friday.
CGI has agreed to purchase the first 100 million shares but has not confirmed whether it plans to buy the remaining shares when they are put up for sale.
As part of the agreement, CGI will remain BCE's preferred IT-services supplier until June 2016, and CGI's agreement to outsource its Canadian communications network management to BCE will be similarly extended.
BCE, which stands for Bell Canada Enterprises, provides a range of telecommunication services, including local telephone, long distance, mobile and Internet, through its subsidiary Bell Canada. BCE said it was no longer "strategically essential" for the group to hold an investment in CGI given that Bell Canada's focus is on providing network-centric managed services and applications.
After launching a multibillion-dollar expansion a few years ago, BCE has begun exiting businesses unrelated to its core telephone and Internet operations.