BT has sealed its deal to buy mobile operator EE in a whopping £12.5bn transaction.
The British telecoms giant said the deal will likely face a year of investigation by the UK’s merger and regulatory authorities completing sometime next year.
The transaction will combine BT’s more than 10m retail customers and EE’s 24.5m mobile subscribers and will be funded through a £1bn share issue and £2.4bn of new debt.
Yesterday’s news that the BT board has reached agreement with the boards of EE’s joint owners, Deutsche Telekom and Orange, sent shares in the British telecoms group soaring 4.49 per cent to 442p.
“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 yesterday.
The news came as EE reported it hit 7.7m 4G mobile customers by the end of 2014 and now has over 8.3m.
“The regulated process is quite long, it will run to October at a minimum and will probably run until the end of this year,” EE chief executive Olaf Swantee told City A.M.
“It is business as usual until the deal closes, we’ve already signed off our business plans for 2015 and we’re going to follow them.”
Despite the growth, operating revenue fell a slight 0.2 per cent excluding the impact of regulation, or 1.4 per cent including regulation to £6.04bn.
BEHIND THE DEAL
PAULO PEREIRA | PERELLA WEINBERG PARTNERS (BT)
1 Pereira has more than 26 years’ experience as an investment banker working across mergers, acquisitions, financing, and restructurings advising on a number of transactions totalling over €450bn.
2 He was previously a managing director of Morgan Stanley’s European media and communications investment banking and European and Asian mergers and acquisitions before joining Perella Weinberg in 2006 as a partner.
3 At Perella Weinberg, Pereira has advised France Telecom in the merger of Orange UK with T-Mobile UK to form what would become EE, Tele2 on the sale of its Italian and Spanish businesses to Vodafone in 2007 and now BT on its £12.5bn takeover of UK network EE.