CGI and Bell Canada announcing major strategic alliance.

MONTREAL, QUEBEC--(BUSINESS WIRE)--OCTOBER 26, 1995--CGI GROUP INC.,BELL CANADABELL CANADA and CGI today announced that they have concluded a major strategic alliance of a commercial and financial nature. According to the general terms of the agreement, CGI will offer its services to Bell Canada's clients in the systems integration sector and will use Bell Canada's network.

This alliance represents a recognition of the potential for synergy and increased competitiveness for both parties. CGI will have access to Bell Canada's vast expertise in telecommunications, while Bell Canada will be associated with a leading Canadian systems integrator.

Bell Canada will inject $18.4 million in CGI's share capital, by subscribing to 2,300,000 first preferred shares Series I, at a price of $8 per share. As a condition of this agreement, Bell expects that the privileges attached to the Series I preferred shares will be modified in order to provide one vote per share, such modification being subject to approval by CGI's shareholders at the next Annual Meeting, which will be held in January 1996. The preferred shares will also be entitled to the same dividends, when declared, as Class A and Class B shares. Upon completion of the transaction, Bell Canada will own approximately 26 percent of the outstanding number of voting shares, representing 5.98 percent of the aggregate number of voting rights attached to all outstanding shares.

This cash infusion will allow CGI to strengthen its position in the information technology industry and will support the company's expansion through internal growth, mergers and acquisition. The agreement stipulates that two Bell Canada nominees will be added to CGI's Board of Directors.

"We are extremely pleased with this development, certainly the most significant in our Company's history. While our industry is undergoing feverish consolidation, and as borders between information technology and telecommunications are fading away, CGI has just associated itself with a world-class leader in the telecommunications industry", said Serge Godin, President and CEO of CGI. "This partnership will provide us with powerful leverage, both commercially and financially, in order to accelerate our internal growth and take advantage of our industry consolidation."

"Bell is a leader in providing solutions based on the superiority of our network. We are committed to meeting the needs of our customers with integrated solutions which include telecommunications, computing or network management", says Louis Tanguay, President and CEO - Bell Canada Local Services. "This alliance is an example of how Bell is working to provide the best technology solutions for our customers. Through a realignment of our major customer sales and support organization which will be announced before year end, Bell will be able to focus even more clearly on customer and industry-specific business solutions. This alliance with CGI will help us bring that vision to reality quickly in some key industries and marketplaces."

The completion of this transaction is expected by mid-November and is subject to obtaining all required regulatory government body and stock exchange approvals and to the execution of final legal documentation acceptable to both parties.

Profiles

CGI is the largest Canadian-owned information technology consulting firm, with more than 1,200 members and annual sales of $100 million. With its complementary expertise in information systems, telecommunications and management, CGI is strongly positioned in three of its industry's principal sectors: consulting services, systems integration and outsourcing. CGI was the first North American company in its industry to earn the ISO 9001 certification for its IT project management framework.

Bell Canada, the largest Canadian telecommunications operating company, markets a full range of state-of-the-art products and services to more than seven million business and residence customers in Ontario and Quebec. Bell Canada is a member of Stentor alliance of Canada's major telecommunications companies.

CONTACT: CGI

Paule Dore

(514) 841-3200

or

Bell Canada

Sylvie Bastien

(514) 870-0332

or

Sandra Cruickshanks

(416) 581-4205