BT enters exclusivity agreement to acquire EE for £12.5bn

BT Group has announced that it has entered into an “exclusivity agreement” with Deutsche Telekom and Orange over the possible acquisition of their UK mobile business, EE.

The period of exclusivity will last several weeks allowing BT to complete its due diligence and for negotiations on a definitive agreement to be concluded.

If the deal goes ahead, BT would own the UK’s largest 4G network, picking up more than 24 million direct mobile customers.

The non-binding terms include a purchase price of £12.5bn for EE on a debt/cash free basis.

Following the transaction, Deutsche Telekom would hold a 12% stake in BT and would be entitled to appoint one member of the BT board of directors. Orange would hold a 4% stake in BT.

EE reported adjusted EBITDA of £1,588m for the 12 months to 30 June 2014.