BT EE Deal Worth £12.5 Billion

BT said on Monday of this week, that it is expecting “significant synergies” from absorbing EE. This will occur mainly through cuts “network and IT rationalisation, back-office consolidation and savings on procurement, marketing and sales costs”. The firm has said that it will complete its due diligence work over the coming weeks before negotiations on a definitive agreement are finalised. They also said the proposed acquisition will “enable BT to accelerate its existing mobility strategy” to “combine the power of fibre broadband, Wi-Fi and 4G.” So this should mean all round good news for customers, right?

BT added it will continue with its own plans for providing enhanced fixed-mobile converged services for businesses and consumers, in line with previous announcements. As result of the transaction, Deutsche Telekom are going to hold a 12 per cent stake in BT and they would be entitled to appoint one member of the BT Board of Directors. Whereas Orange would hold a 4 per cent stake in BT.

BT is also expecting “revenue synergies” through selling fixed-line services to EE customers who currently do not take a service from BT. The firm wants to accelerat the sale of converged fixed-mobile services to BT’s existing consumer and business customers.

EE currently has 24.5 million direct mobile customers and reported adjusted EBITDA of £1,588m for the year period to 30 June 2014. This deal, if finalised, would add an extra £6bn to BT’s annual turnover of £18bn.

[Image via thecsuite]

SOURCE: http://www.theregister.co.uk/2014/12/15/bt_to_acquire_ee_for_125bn/