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BT Acquires EE for GBP12.5B, Deutsche Telekom to Retain 12% in Combined Entity

BT Acquires EE for GBP12.5B, Deutsche Telekom to Retain 12% in Combined Entity Image Credit: BT

BT has reached an agreement with Deutsche Telekom and the French telecommunications operator Orange to acquire the largest mobile operator in UK, EE for GBP12.5 billion. Deutsche Telekom will receive 12% in the new combined business and have a seat on the board, while Orange will receive a 4% stake, as well as about £3.4bn in cash. The agreed purchase price of  for EE is an attractive valuation at 7.9 times the operating EBITDA of 2014.  

The transaction will offer BT an attractive market position, marked by convergent products for consumers, integrated solutions for business customers, outstanding customer proximity thanks to UK-wide shop presence, and attractive content and TV services and leading network quality. The combination with EE is expected to create savings of as much as £4.6bn after integration costs in areas such as sales, marketing, administration, and cross- and up-selling integrated products combining mobile, fixed-network services and TV.

Gavin Patterson, Chief Executive Officer of BT
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. 

Stéphane Richard, Chief Executive Officer of Orange
This is a landmark transaction for Orange and the next natural step in the evolution of BT and EE. We are confident the combined company will go on to provide new and exciting services to its customers as the demand for data and connected services continues to grow.

Tim Höttges, Chief Executive Officer of Deutsche Telekom
The transaction is much more than just the creation of the leading integrated fixed and mobile network operator in Europe's second largest economy. We will be the largest individual shareholder in BT and are laying the foundations for our two companies to be able to work together in the future. This is another example of the consistent and successful execution of our portfolio optimisation strategy.

Author

Ray is a news editor at The Fast Mode, bringing with him more than 10 years of experience in the wireless industry.

For tips and feedback, email Ray at ray.sharma(at)thefastmode.com, or reach him on LinkedIn @raysharma10, Facebook @1RaySharma

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