Good call? BT to snap up EE for £12.5bn in "major milestone"

BT hopes to become a leader in the 4G market

BT has sealed the deal: it will buy EE, Britain’s largest mobile network, for £12.5bn (subject to approval from regulators).

As part of the deal, EE’s owners Deutsche Telekom and France’s Orange will sell 100% of their shares.

Deutsche Telekom will now own 12% in the new combined business and have a seat on the board, while Orange will receive a 4% stake and £3.4bn in cash.

EE chief executive Olaf Swantee said: “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.”

BT chief executive Gavin Patterson 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.”

Here’s what you need to know about the deal:

BT tower

Why did BT buy EE?

BT forked out billions for EE to re-enter the mobile market. Back in 2001, it bowed out of the mobile market by spinning off O2, which was later acquired by Spain’s Telefónica for £17.7bn.

What is BT hoping to do with EE?

EE has over 7.7 million 4G customers, making it a leader in the fast mobile bandwidth space. BT is hoping to capitalise on EE’s 4G success.

All in all, BT hopes the combined businesses will together be able to produce £1.6bn in extra sales annually.

What next?

The deal will now be scrutinised by the Competition and Markets Authority. If all goes to plan, the deal could be finalised by March next year.

Do you think this is a wise acquisition by BT? Is the price fair? Let us know @londonlovesbiz and in comments below

 

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Readers' comments (1)

  • This is about the worst thing that can happen to competition. BT is basically a nasty company that abuses its monopoly position in land lines and its customers.

    Hope the regulators see the risks involved in letting BT own most of the UK infrastructure both land and mobile. its just not a safe move.

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