BT has bought mobile phone network EE from Deutsche Telekom and French company Orange, for the sum of £12.5bn
BT was recently in talks to buy O2, the network providing business it demerged in 2001. The telecoms groups will be making its return to the mobile market with EE instead, in a deal that will unlock a customer base of 31m as well as Europe’s largest 4G network.
The deal will be paid via a combination of cash and BT shares, issued both to Deutsche Telekom (DT) and Orange.
The transfer of shares will see German group DT owning 12% of BT, who will be able to appoint one non-executive member of the BT board of directors and be made the largest shareholder in BT. Orange will hold a 4% stake.
With companies uniting, BT will gain access to EE’s 834,000 fixed broadband customers, allowing the potential to sell bundles of broadband, mobile, landline and television to its customers.
Gavin Patterson, BT’s Chief Executive, said:
This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them. The UK’s leading 4G network will now dovetail with the UK’s biggest fibre network, helping to create the leading converged communications provider in the UK. Consumers and businesses will benefit from new products and services as well as from increased investment and innovation.”
Hard work follows the agreement, as it will need to be worked out bring the business together in a way that will achieve the £3bn of cost savings forecast for the combination, as well as to negotiate any regulatory hurdles raised to address competition issues from the deal.