Deutsche Telekom and Orange sell their mobile JV EE to BT for GBP 12.5 billion
Upon closing of the transaction, Deutsche Telekom will become the largest shareholder in BT with a stake of c. 12 percent.
Tim Höttges, chief executive officer of Deutsche Telekom, highlighted the significant value creation for the Deutsche Telekom group and said: "The transaction is much more than just the creation of the leading integrated fixed and mobile network operator in Europe's second largest economy."
Gavin Patterson, chief executive officer of BT, said: "This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them. The UK's leading 4G network will now dovetail with the UK's biggest fibre network, helping to create the leading converged communications provider in the UK. Consumers and businesses will benefit from new products and services as well as from increased investment and innovation."
Stéphane Richard, Chief executive officer of Orange, said: "This is a landmark transaction for Orange and the next natural step in the evolution of BT and EE. We are confident the combined company will go on to provide new and exciting services to its customers as the demand for data and connected services continues to grow."
The agreed purchase price of GBP 12.5 billion for EE is an attractive valuation at 7.9 times the operating EBITDA of 2014. Depending on BT's share price and other factors at closing, Deutsche Telekom may receive a cash payment beside the 12 percent stake in BT. Deutsche Telekom will retain exposure to the potential synergies. A lock-up period of 18 months has been agreed for the BT shares of Deutsche Telekom.
Deutsche Telekom will be given a seat on BT's Board of Directors. Based on its experience in other markets, Deutsche Telekom will look to contribute to the successful integration of EE into BT and the development of fixed-mobile convergent products. ■