BT confirms terms of £12.5bn EE takeover, equity placing

BT has confirmed reports it has settled on terms of its acquisition of EE from Deutsche Telekom and Orange, saying it will be spending £12.5bn on the UK mobile network.

BT has been in exclusive talks since December with Deutsche Telekom and Orange about buying Britain’s largest mobile network in a move that will see it return to the mobile market for the first time in 14 years.

In a statement on Thursday morning, the telecom giant said it had agreed definitive terms of the deal, which will be financed by a combination of new debt facilities and a £1bn placing of BT shares.

Following the deal and placing, Deutsche Telekom will hold a 12% stake in BT and will be allowed to appoint one non-executive to its board, while Orange will own 4%.

BT’s chief executive Gavin Patterson said this was a “major milestone” for the company, “allow[ing] us to accelerate our mobility plans and increase our investment in them”.

“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,” he said.

EE, which has 31m customers in the UK and the largest 4G customer base in Europe, is being valued at 6.0 times earnings before interest, tax, depreciation and amortisation.

The purchase should provide BT with operating cost and capital expenditure synergies of around £360m per annum, from the fourth full year after completion.