EE is to be bought for £12.5bn by BT

BT is destined to become the largest operator in the UK
BT is destined to become the largest operator in the UK

After less than 60 days of negotiations BT informed that it will take over EE for 12.5 billion pounds.

In the middle of December, BT announced that it is in serious talks with EE over acquiring it. British telecommunications giant wanted to use EE’s customer base and network with the largest mobile coverage to enter the mobile phone market and as a result become a major player on the quad play market. Now, the operator assured that the negotiation period is over and the sale is going to be completed in March 2016.

The deal itself is a combination of shares and cash in the total value of £12.5bn. Deutsche Telekom and Orange, current owners of EE, will get 12% and 4% stake in BT respectively. Orange will additionally get £3.4bn in cash. The prices may seem to be overwhelming at first but if you consider what kind of potential is behind EE, you may see that BT got a fair deal.

The news means that BT will become the largest telecommunications company in the UK that will have both the largest broadband network and the best and the most advanced mobile coverage. Obviously, that was positively reflected on BT’s share price as it rose by 4.5%, proving that BT’s return to the mobile market. Gavin Patterson, the CEO of BT, called this deal a milestone that would help accelerate sales and create leading world-class digital infrastructure for Britain.

Some customers see this as a potentially dangerous situation as consolidation may hurt them because competition will lessen. Patterson reassured that if there are to be any changes for the customers they will be only positive. To his mind, consumers will be able to get a full package of telecommunications service at a better price, because quad play can offer price reduction as consumer buy services as a bundle.  Nevertheless, before the deal is finalized the operators need to get an approval from UK Competition and Markets Authority which looks over the market and keeps the market fairly competitive.

Olaf Swantee, CEO of EE, commented on the news saying that he is excited by this deal and sees it as an opportunity for the UK to be the leader in mobile technologies. This will have great consequences for the market and we hope to see technological development as a result of the consolidation of the market.