Updated from 11:16 a.m. EDT

Moving to form the biggest wireless player in Canada, telecommunications company Telus said Monday that it would acquire Clearnet Communications ( CLNT) in deal valued at $3.1 billion.

Telus of Western Canada has offered to exchange about $47.62 in cash or 1.636 Telus non-voting shares for each Clearnet share and assume $1.4 billion in Clearnet debt. Those figures are based on a currency exchange rate of 1.47 Canadian dollars per U.S. dollar.

The proposal represents a 53% premium to Ontario-based Clearnet's closing price of 31 on Friday. And it comes at a time when Telus, operating in British Columbia and Alberta; and rival Bell Mobility, dominant in Ontario and Quebec, are trying to expand into each other's turf.

Investors rushed to Clearnet's side on news of the announcement Monday, sending the company stock up 13, or 42%, at 44.

The deal would give the combined company 1.8 million customers and a license to provide coverage to 30.7 million potential customers, the companies said. The companies expect to complete the pact in October, creating a company with about $4.4 billion in annual revenue.

George Cope, president and chief executive of Clearnet, said in a statement that the companies' customers would benefit from an array of new services, including new wireless data and Internet options.

The deal "means we will have unparalleled human and financial resources to capitalize on the wireless revolution in voice, Internet and data services," said Cope, who would become president and chief executive of the combined entity.

In addition, the partnership allows Telus to avoid the "expense and uncertainties" involved in expanding a wireless network across Canada and developing its own wireless organization in Eastern Canada, the company said in a statement.

Telus added that it now would be able to "compete in the wireless market on a national scale approximately three years sooner than if it had decided to build its own network."

Nextel Communications has agreed to exchange all of its Clearnet shares for Telus non-voting shares, while Motorola Canada, a unit of Motorola , has said it would hand over three quarters of its Clearnet stock for Telus non-voting shares, according to the statement. As a result, that would give the two major Clearnet shareholders 22.5 million Telus shares.

Telus also has formed lock-up agreements with Clearnet shareholders that together have more than 86% of the voting interest in Clearnet and more than a 30% economic stake in Clearnet.