Talks will last for several weeks as BT performs due diligence on cash/equity takeover
BT has entered exclusive talks to acquire EE after the telecoms provider chose the UK’s largest mobile operator over O2, it has confirmed.
EE’s owners Deutsche Telekom and Orange are looking to sell the operator to BT in a deal worth £12.5 billion, which will also see the German company gain a 12 per cent stake in BT, while Orange will get a 4 per cent stake.
BT has now entered exclusive talks which will last several weeks and will allow BT to perform due diligence on the potential takeover, it said in a statement.
BT’s statement said: “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.”
BT had also been in discussions with Telefonica to purchase O2, but these talks will cease while BT is negotiating the potential with EE’s owners. EE will also be forced to cease any potential talks with Three owner Huchinson Whampoa, also reportedly interested in a takeover.
According to people close to the matter, Telefonica could try to disrupt the potential takeover by making a late counter offer to sell O2 for a reduced price.
A potential takeover of EE could also face more regulatory scrutiny as it would see the UK’s largest mobile operator (24.5 million subscribers) combine with the largest fixed-line provider.
Mobile News contacted EE but it declined to comment.