UK telecoms giant BT has confirmed it is in exclusive negotiations with Deutsche Telekom and Orange with a view to buying the 4G network Everything Everywhere (EE) for stg£12.5bn (€15.7bn).
The period of exclusivity will last 12 weeks, which will include due diligence.
The move by BT is reflective of the consolidation happening in telecoms as operators strive to offer a full gamut of quad play services including broadband, phone, mobile and TV services. It has emerged in recent weeks that Vodafone is eyeing up acquiring Liberty Global in a move that would give the mobile operator fixed fibre assets.
BT said that the proposed acquisition of EE would accelerate its mobility strategy, combining the power of fibre broadband, Wi-Fi and 4G.
BT sets sights on UK’s most advanced 4G network
“BT would own the UK’s most advanced 4G network, giving it greater control in terms of future investment and product innovation,” the company said.
Should a transaction not take place BT said it remains confident of delivering fixed-mobile converged services for businesses and consumers regardless.
Key headline terms of the deal include the purchase price of stg£12.5bn for EE in cash and stock.
Following the transaction Deutsche Telekom would hold a 12pc stake in BT and join the BT board while Orange (formerly France Telecom) would hold a 4pc stake in BT.
BT shareholders would have to approve the deal before any transaction can go ahead.
EE currently has 24.5m direct mobile customers in the UK and EBITDA of stg£1.5bn for the year ending 30 June 2014.
It emerged in recent weeks that BT was considering a return to mobile through acquisition of either O2 from Telefonica or EE from Deutsche Telekom and Orange.
BT sold its original mobile network O2 to Telefonica in 2005 for stg£18bn.
BT Tower in London image via Shutterstock