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BT

BT agrees 12bn deal to buy EE

Deal merges Britains most-advanced mobile 4G network with the company

that owns and operates the UKs biggest telecoms and broadband network

BT is set to buy EE for 12bn. Photograph: Facundo Arrizabalaga/EPA

Angela Monaghan
Thursday 5 February 2015 08.12 GMTLast modified on Friday 6 February
201500.05 GMT

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BT Group has finalised a 12.5bn deal to buy EE, Britains largest mobile
phone network, and cement its status as the biggest player in the UK
telecoms market .
Gavin Patterson, BTs chief executive, described the transaction as a major
milestone for the company, combining the owner of the UKs biggest
telecoms and broadband network with the countrys mostadvanced 4G mobile system.
Shares in BT jumped 4.5% to 442p, the second biggest rise in the FTSE 100,
as investors welcomed the groups return to the mobile market. It spun-off
its 02 network in 2001. The transaction will make BT the latest company to
offer bundled packages of broadband, landline, mobile and pay-TV. Known
in the industry as quadplay, it is already offered by TalkTalk and Virgin
Media and soon Sky will sell it too after it signed a deal with 02.
Buying bundled telecoms and TV services has been popular with costconscious households in Europe, particularly in Spain.
Patterson sought to assuage fears that consolidation in the UK telecoms
market will hurt consumers, saying that combining services should reduce
prices. If you look across the continent, prices in general have come down
to some extent when fixed and mobile products are sold as a bundle. So I
expect some of the savings we are able to make by simplifying the network
will be passed on to the consumer.
The UKs leading 4G network will now dovetail with the UKs biggest fibre
network consumers and businesses will benefit from new products and
services as well as from increased investment and innovation.
Patterson said he expected the deal to be approved by the UK Competition
and Markets Authority, without having to change the terms.
However Vittorio Colao, the chief executive of rival Vodafone, said the deal
required more scrutiny, and that BTs Openreach, which is rolling out
superfast fibre broadband in the UK, should now be spun off.
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Olaf Swantee, EE chief executive, said the deal ensured that the UK would
remain at the forefront of the global mobile industry.
BT revealed in December it was in exclusive talks to buy EE, which has 31
million customers and the largest 4G customer base of any operator in
Europe. BT has about 10 million customers.
Under the terms of the deal, BT will pay EE owners Deutsche Telekom and
Orange a combination of cash and shares. It will leave Deutsche Telekom
Germanys partly state-owned telecoms company with a 12% stake in BT,
while Frances Orange will be paid about 3.4bn in cash and hold a 4%
stake.
BT expects combining the two companies to lead to 360m of savings a
year. To achieve this, there will be about 600m of integration costs, BT
said, but the company said it was too early to speculate on whether there
would be job losses.
Meanwhile Hutchison Whampoa is now in talks to buy BTs former unit O2
from Telefnica for up to 10.25bn, accelerating consolidation in the
industry if the deal goes ahead. Hong-Kong based Hutchison, run by Asias
richest man, Li Ka-shing, already owns the 3 mobile network and
combining it with O2 would create the UKs biggest mobile group.
The Communication Workers Union welcomed the deal between BT and
EE, which employs about 13,000 people, saying that it should bring job
security and better terms for staff. The union, the biggest in the UK
telecoms sector, said its membership had increased since speculation about
the deal emerged.
Andy Kerr, CWU deputy general secretary, said: We expect this to
strengthen job security for workers at both BT and EE. We will be
discussing issues on future employment with the company following this
takeover and in particular the CWU is keen to fully represent workers
across EE.
This takeover should present the opportunity for a positive move on
employment relations for the thousands of people working at EE.

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more on this story

How does BTs purchase of EE affect me?

BT has just spent 12.5bn acquiring the mobile provider, but what will this
mean for the customers of both firms?
5 Feb 2015
How does BTs purchase of EE affect me?

UK mobile phone call rates slashed by

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Regulator unveils plans to cut cost of calls between networks from 0.817p a
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6 Feb 201514
UK mobile phone call rates slashed by Ofcom

comments (104)
This discussion is closed for comments.
Order by Oldest
Threads Collapsed
12

ChrisMorley67
5 Feb 2015 8:36
67
Makes you wonder where BT could have been today if it had not sold 02 to
Telefonica in 2005.
Still they sold that for 18bn and it's only costs them 12bn to reestablish a
mobile presence...
Report

o
showmaster ChrisMorley67

5 Feb 2015 9:54

2324
Makes you wonder even more where UK PLC would be had Thatcher not
stopped BT putting a fibre optic cable into every premises back in the 80's?
She was determined to pour money into the cable operators pockets and
make her husband even richer and we are still way behind where we could
have been thirty or more years ago in terms of connectivity.
Report

o
ElanSprint showmaster
5 Feb 2015 10:16
89
How much money would have poured into the Treasury from BT over the
years had it not been given away to the super-rich. Talk about selling the
goose that lays the golden egg.
Report
o

Show 3 more replies

xxxFreePalestinexxx
5 Feb 2015 8:51

1011

A British company buying another company instead of being bought by

some foreign dictatorship (any middle eastern royal family) or any foreign
money for that matter is great news!
Report

o
stevetyphoon xxxFreePalestinexxx
5 Feb 2015 9:53
910
Ok, good news it isn't a foreign buyer. Bad news for us lot though. Less
choice, bad customer services, bad coverage, no incentive for them to
improve.
The whole idea of privatisation in the first place was to address those
issues but as time has gone on we are seeing the opposite.
Report

o
jpldn2 stevetyphoon
5 Feb 2015 10:58
34
"The whole idea of privatisation in the first place was to address those
issues but as time has gone on we are seeing the opposite."
Do you remember how bad BT was pre privatisation?????
Report

Show 3 more replies

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