BT agrees to talks over $19.5 bln EE mobile deal

Pedestrians walk past an EE shop on Oxford Street.
Reuters
Pedestrians walk past an EE shop on Oxford Street.

BT, the U.K. telecoms giant, has announced that it has entered into exclusive talks with Deutsche Telekom and Orange to acquire their mobile business EE, a move which is set to spark a wave of consolidation in the U.K. telecoms market.

BT announced in a statement that key terms would include a purchase price of £12.5 billion ($19.5 billion).

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"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 fiber broadband, wi-fi and 4G," the company said in a statement .

"BT would own the UK's most advanced 4G network, giving it greater control in terms of future investment and product innovation."

The exclusivity period would last several weeks, BT said in the statement, in which time the UK telecoms giant would complete due diligence and conclude negotiations.

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BT was also in negotiations with Telefonica over its mobile arm O2, which may now become the focus of other takeover deals.

Consumers are increasingly interested in so-called "quad play" deals, offering television, internet, landline and mobile phone contracts in one package. In the U.K., Virgin is the only phone company currently offering these deals, but BT, the country's biggest telecoms company, is expected to start following the deal with Deutsche Telekom and Orange.

Correction: The headline has been updated to show that BT is in exclusive talks to buy EE.