Telecoms giant BT has acquired mobile network EE for £12.5bn.
EE is the largest mobile network operator in the UK with 31 million customers of which 24.5 million are direct mobile customers and 834,000 are fixed broadband customers. It has the largest 4G customer base of any operator in Europe.
The takeover includes BT selling its broadband, fixed telephony and pay-TV services to those EE customers who do not currently take a service from BT.
In a statement, BT said it 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.
Orange and Deutsche Telekom, the two existing EE shareholders, will sell 100% of their shares.
Deutsche Telecom will hold 12% in the new combined business and have a seat on the board, whilst Orange will receive a 4% stake, as well as around £3.4 billion in cash.
BT will sell further shares to raise around £1 billion.
“This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them,” said BT chief executive Gavin Patterson.
“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 news comes as further speculation over consolidation in the mobile market grows. Three owner, Hutchison Whampoa, is reportedly in talks to buy O2 in the UK, whilst there is speculation that Vodafone and Virgin are set for a possible deal.
Sky is also set to add a range of mobile voice and data services to its customer offering for the first time, following a new agreement with Telefonica UK.
Under the terms of the multi-year deal, Telefonica UK, which owns O2, will give Sky wholesale access to 2G, 3G and 4G services, with Sky planning to launch its first mobile service to customers in 2016.
The BT and EE transaction is subject to approval by the shareholders of BT and merger clearance, in particular from the UK Competition and Markets Authority. It is expected to complete before the end of BT’s 2015/16 financial year.
