Member Article

BT on the verge of £12.5 billion takeover of EE

BT Group plc has announced that it has entered into exclusive talks with Deutsche Telekom and Orange in relation to BT’s possible acquisition of all of their UK mobile business, EE for £12.5 billion.

The period of exclusivity will last several weeks allowing BT to complete its due diligence and for negotiations on a definitive agreement to be concluded.

The proposed acquisition would enable BT to accelerate its existing mobility strategy whereby customers will benefit from services that combine fibre broadband, wi-fi and 4G.

BT would own the UK’s “most advanced” 4G network, giving it greater control in terms of future investment and product innovation.

While continuing these exclusive discussions, BT will progress its own plans for providing enhanced fixed-mobile converged services for businesses and consumers, in line with previous announcements. It remains confident of delivering on these plans should a transaction not take place.

The consideration for EE will be payable as a combination of cash and new BT ordinary shares issued to both Deutsche Telekom and Orange.

Following the transaction, Deutsche Telekom would hold a 12% stake in BT and would be entitled to appoint one member of the BT board of directors.

Orange would hold a 4% stake in BT. In considering the financing of the cash element, BT has a range of options and is mindful of the importance of maintaining a conservative financial profile.

EE has 24.5 million direct mobile customers and reported Adjusted EBITDA of £1.588 billion for the twelve months to 30 June 2014.

This was posted in Bdaily's Members' News section by Clare Burnett .