BT will acquire EE, the UK’s largest mobile network operator, for £12.5 billion.
The newly merged company will now boast the UK’s largest 4G network and most extensive superfast broadband networks, allowing BT to offer a "quad-play" deal of broadband, fixed telephone, TV and mobile.
"BT expects to generate revenue synergies by providing a full range of communications services to the combined customer base," a statement from the company read.
"This includes BT selling its broadband, fixed telephony and pay-TV services to those EE customers who do not currently take a service from BT. BT also expects to accelerate the sale of converged fixed-mobile services to BT’s existing consumer and business customers and offer new services, using both companies’ product portfolios, skills and networks."
The consideration will be payable in both cash and new BT shares issued to Deutsche Telekom and Orange, EE’s current majority shareholders.
Deutsche Telekom will now hold a 12 percent stake in BT and be entitled to appoint a non-executive member to BT’s Board of Director, while Orange will hold a 4 percent stake in BT.
Subject to approval from the UK’s competition watchdog, the UK Competition and Markets Authority, the deal is expected to be completed before the end of BT’s 2015/2016 financial year.
Gavin Patterson, BT CEO, commented: "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."
"The deal provides an attractive opportunity for BT to generate considerable value for shareholders, with significant operating and capital investment efficiencies supported by our tried and tested cost transformation activities. The enlarged BT will offer significant opportunities for employees as we lead the creation of a world-class digital infrastructure for Britain."
EE CEO Olaf Swantee said: "Joining BT represents an exciting next stage for our company, customers, and people. In the last few years alone, we have built the UK’s biggest, fastest and best 4G network, significantly advancing the digital communications infrastructure for people and businesses across Britain."
"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."
Today also saw the release of EE’s financial results for Q4 and full year 2014, which revealed revenue of £6.041 billion, a 1.4% increase from 2013, with Q4 revenues up 1.8%.
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