BT is officially acquiring EE for £12.5 billion
The British telecom giant BT officially announced that it has agreed to acquire EE, the UK’s largest mobile carrier, for £12.5 billion. BT has been exploring the idea for months now, but this week’s announcement makes the deal official.
BT had been in exclusive talks with the owners of EE, Orange and Deutsche Telekom, about the acquisition. The German and French companies will respectively hold 12 percent and 4 percent stakes in BT.
“This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them,” BT Chief Executive Gavin Patterson said on Thursday.
Now that BT owns EE the company has access to the largest 4G customer base of any European operator, with more 21 million customers. Through the acquisition, the London-based telecoms giant now operates the largest 4G network in the country to go with its landline, broadband, and TV services.
Rumours of a potential deal circulated in December. At the time it was unsure whether BT would acquire EE or O2. Earlier this year it was confirmed that BT was going to purchase EE, which led to the parent company of UK network Three entering talks with O2 about acquiring that business – which was confirmed last month.
With BT’s acquisition of EE and the Three-O2 merger, the UK telecom industry will become much more consolidated.
There are concerns that BT’s dominance in the market will result in higher prices for the majority of British households.
However, Patterson said that consumers could expect savings through buying a package of services from BT.
“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,” he said. “So I expect some of the savings we are able to make by simplifying the network will be passed on to the consumer.”
The deal will be scrutinised by the UK Competition and Markets Authority as it faces a contested approval process.