Tie-up with mobile operator EE confirmed

BT to place £1 billion in shares to help create biggest telecoms network

BTBT is to issue £1 billion of shares to help finance its £12.5bn acquisition of EE after agreeing terms on the deal. It will combine Britain’s most advanced 4G operator with the biggest broadband provider and BT said it creates a platform for even greater growth.

EE, which includes Orange and Deutsche Telekom, has 31 million customers of which 24.5m are direct mobile customers and 834,000 are fixed broadband customers. It has the largest 4G customer base of any operator in Europe.

Aside from the new shares, the deal will be financed by new deb. The equity placing will be launched in due course

Deutsche Telekom will hold a 12% stake in BT, making it the biggest single shareholder, and will be entitled to appoint one non-executive member of the BT board of directors. Orange will hold a 4% stake.

BT expects combined operating cost and capital expenditure savings of around £360m a year by the fourth full year after completion. It also expects a boost to revenue by selling its BT broadband, fixed telephony and pay-TV services to EE customers.

The Transaction is subject to approval by BT shareholders and merger clearance from the UK Competition and Markets Authority. It is expected to complete before the end of BT’s 2015/16 financial year.

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 deal provides an attractive opportunity for BT to generate considerable value for shareholders.”

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.”


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