It’s now official – BT has confirmed that it is acquiring EE, after entering into exclusive negotiations with the mobile operator at the end of last year.
The definitive terms see the purchase price set at £12.5 billion, with the sum being paid in cash and BT shares issued to Deutsche Telekom and Orange. After the deal is done, Deutsche Telekom will own a 12 per cent stake in BT, and Orange a 4 per cent stake. Deutsche Telekom will also be able to appoint one non-executive member of the BT Board of Directors.
BT noted that it expects to save £360 million per year in terms of combined operating cost and capex synergies, four years down the line post-deal. The company will be able to flog its broadband, landline and TV services to EE customers, and of course vice versa with EE’s mobile service, with additional revenue from the combination of both firms expected to tot up to around £1.6 billion.
The deal is still subject to approval by BT shareholders and regulators, but it is expected to go through before the close of BT’s 2015/16 fiscal year.
CEO of BT Gavin Patterson commented: “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.”
Olaf Swantee, EE chief executive, said: “Joining BT represents an exciting next stage for our company, customers, and people. In the last few years alone, we have built the UK’s biggest, fastest and best 4G network, significantly advancing the digital communications infrastructure for people and businesses across Britain.
"Today’s announcement will ensure the UK remains at the forefront of the mobile revolution, bringing even more innovation and investment in world leading connectivity for our customers."
Of course, the impact of this giant converged communications provider will be what regulators will scrutinise.