BT aims to ring up £12.5bn deal for mobile firm EE

Telecoms group BT today announced it has entered exclusive talks over a £12.5 billion deal to buy EE, Britain’s biggest mobile phone operator.

The move comes after days of speculation over whether the firm would mount a bid for O2 or rival EE, which is owned by Deutsche Telekom and France’s Orange, as part of its long-awaited return to the mobile phone sector.

BT will begin several weeks of talks over the potential £12.5bn cash and shares deal, a move set to result in Deutsche Telekom holding a 12 per cent stake in BT and Orange taking a 4 per cent interest in the former monopoly.

The group, led by chief executive Gavin Patterson, said: “BT expects significant synergies mainly through network and IT rationalisation, back-office consolidation and savings on procurement, marketing and sales.

“In addition, BT expects to generate revenue synergies through selling fixed-line services to those EE customers who do not currently take a service from BT, and by accelerating the sale of converged fixed-mobile services to BT’s existing consumer and business customers.”

EE has 24.5m direct mobile customers and reported adjusted underlying earnings of almost £1.6bn for the year to 30 June.

O2, formerly known as BT Cellnet, was spun off from BT in 2001. It was then taken private in 2005 through a £17.7bn takeover by Spanish rival Telefonica.

In July, BT took its first big step back into the mobile phone market as it launched a new business service aimed at delivering fixed line and mobile calls to the same handset.