BT Group plc (BT) announces that,
further to its statement on 24 November 2014, it has entered into an
exclusivity agreement with Deutsche Telekom and Orange in relation to BT’s
possible acquisition of all of their UK mobile business, EE. The period of
exclusivity will last several weeks allowing BT to complete its due diligence
and for negotiations on a definitive agreement to be concluded.
The proposed acquisition would enable BT to
accelerate its existing mobility strategy whereby customers will benefit from
innovative, seamless services that combine the power of fibre broadband, wi-fi
and 4G. BT would own the UK’s most advanced 4G network, giving it greater
control in terms of future investment and product innovation.
While continuing these exclusive
discussions, BT will progress its own plans for providing enhanced fixed-mobile
converged services for businesses and consumers, in line with previous
announcements. It remains confident of delivering on these plans should a
transaction not take place.
The key headline terms, which are
non-binding, include a purchase price of £12.5bn for EE on a debt/cash free
basis. The consideration for EE will be payable as a combination of cash and
new BT ordinary shares issued to both Deutsche Telekom and Orange. Following
the transaction, Deutsche Telekom would hold a 12per
cent stake in BT and would be entitled to appoint one member of the BT Board of
Directors. Orange would hold a 4per cent
stake in BT. In considering the financing of the cash element, BT has a range
of options and is mindful of the importance of maintaining a conservative
financial profile.
BT expects significant synergies
mainly through network and IT rationalisation, back-office consolidation and
savings on procurement, marketing and sales costs. In addition, BT expects to
generate revenue synergies through selling fixed-line services to those EE
customers who do not currently take a service from BT, and by accelerating the
sale of converged fixed-mobile services to BT’s existing consumer and business
customers.
The exclusivity agreement does not
require the parties to enter into a transaction and there can be no assurances
that one will occur. If a transaction is agreed, approval by BT’s shareholders
will be required as a condition of the purchase.
Share