Sept 2 (Reuters) - Telus ( TU ) said on Tuesday it would

buy the remaining shares in its digital services unit in a $539

million cash-and-stock deal, as the Canadian telecom company

looks to expand its artificial intelligence capabilities.

The company has offered $4.50 per share to buy the Telus

Digital shares it does not own and take the unit

private. The deal has a total transaction value of about $2.9

billion, the companies said.

Telus ( TU ) is taking full ownership of its digital services unit,

which offers IT services, to better integrate the subsidiary's

AI and software capabilities.

The digital unit's shareholders will get an option to either

get $4.50 in cash, 0.273 Telus ( TU ) share, or half of each in cash

and stock. The option for stock is capped at 25% of the total

consideration and any excess paid in cash, Telus ( TU ) said.

On a U.S. dollar basis, the offer is 52% above Telus

Digital's unaffected closing price of $2.96 on June 11, Telus ( TU )

said. The price is also 32% higher than Telus' ( TU ) initial $3.40

proposal on June 11.

The Canadian telecom company currently holds about 86.9%

of Telus Digital's voting power.

Telus Digital's independent special committee unanimously

recommended the new deal and its board approved it, the

companies said.

The deal is expected to close in the fourth-quarter of this

year.