It has been confirmed that BT is in advanced talks to purchase EE for £12.5 billion.
EE is the largest mobile network group in the UK and a period of exclusivity has been agreed between the parties that will be in place for a few weeks while the negotiations are taking place. This agreement is to ward off other bidders while the talks are in progress.
BT confirmed in November that it was in talks to purchase either O2, currently owned by Telefonica, or EE with the aim of strengthening its mobile strategy. EE seems to be the target of choice.
The deal that is on the table would give Deutsche Telekom and Orange – the current owners of EE – a stake in BT. Deutsche Telekom would secure 12% and Orange 4%. Deutsche Telekom would also be appointing a member to the BT board. Purchasing EE would give BT a large communications network covering home phones, mobile, broadband and TV. This would allow BT to push new quad-play bundles (broadband, landline, TV and mobile) to its customers.
EE is leading the UK market in 4G services and has more than 24 million customers. An acquisition of EE would ensure that BT’s customers are able to access internet services seamlessly no matter how they choose to do so.
The deal should save on IT and office expenses along with cutting back on marketing and sales costs. BT also hopes to be able to bring EE customers over to fixed line services if they do not already have a BT line.
BT has said that it still hopes to be able to deliver planned services even if the negotiations with EE do not reach a satisfactory conclusion.