BT in "exclusive" talks to buy EE for £12.5bn

BT is undertaking exclusive talks to acquire EE – Britain’s largest mobile network group – for £12.5bn as it seeks to integrate services for customers.

“The proposed acquisition would enable BT to accelerate its existing mobility strategy,” BT said in a statement.

“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,” BT continued.

EE currently holds 33.8% of the UK mobile market by revenue, according to Citigroup.

The move comes as telecommunication company’s seek to diversify their offerings – the deal would see BT cover fixed-line phones, broadband, mobile and TV.

In late November this year, BT said it was in talks to purchase EE or O2. The current period of exclusivity will last “several weeks” to allow for sufficient negotiation.

According to the proposed deal, EE’s German-based owner, Deutsche Telekom and France’s Orange would take a 12% and 4% stake in BT respectively.

Under the terms Deutsche Telekom would also be entitled to appoint one member to the board, said BT.

BT said owning EE would accelerate its plan of giving customers seamless access to the Internet whether via fibre broadband, wi-fi hotspots or 4G mobile services.

However, the acquisition will see BT, the UK’s market-leader in fixed line, twin with the number one mobile operator – sparking concerns over size and market domination.

Paolo Pescatore, a communications analyst at CCS Insight, said: “We believe it is unlikely that Ofcom would block the deal, but the combined entity could be forced to dispose of some spectrum [assets].”