BT reaches agreement to purchase EE

BT has signed an agreement to buy EE for £12.5 billion.

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By :  ,  Financial Analyst

Telecommunications giant BT has reached an agreement to be purchase mobile operator EE.

The deal, worth £12.5 billion, will see the creation of a huge communications company which covers fixed-line phones, broadband, mobile and TV. BT has been recently expanding its service into other areas with the launch of BT Sport which aims to become a long-term rival to fellow broadcaster Sky when it comes to sports coverage.

BT explained that the takeover will involve current EE shareholders Orange and Deutsche Telekom selling 100 per cent of their shares. The new combined business will include a 12 per cent cent stake owned by Deutsche Telekom while Orange will have a four per cent stake, as well as receiving around £3.4 billion.

Gavin Patterson, BT's chief executive, said: "This is a major milestone for BT as it will allow 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."

Leader in the mobile market

EE is currently the largest mobile network operator in the UK boasting a customer base of 31 million, 24.5 million being direct mobile customers. It was also one of the first companies to offer users superfast 4G broadband and has now expanded this service across Europe.

It was originally founded in 2010 when Orange and Deutsche Telekom came together in a 50:50 joint venture. The agreement took into account the company's operations in the UK, as well as T-Mobile UK.

BT stated that the takeover will include the provision of the full range of communications services to the combined customers. The company will sell broadband, fixed telephony and pay-TV services to EE customers who currently do not have the service.

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