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LONDON (Alliance News) - BT Group PLC said Thursday it has agreed to acquire mobile network EE Ltd for GBP12.5 billion, in a cash and share deal that will give EE's joint owners Deutsche Telekom AG and Orange SA stakes in BT.
BT will pay the cash amount through a combination of new debt financing and around GBP1 billion from the placing of new BT shares. It said this placing will be launched in due course.
BT also will issue shares to EE's two current owners. Deutsche Telekom will take a 12% stake in BT, and will be able to appoint a non-executive member to BT's board, Orange will take a 4% stake.
BT said it expects to secure cost and capital expenditure synergies of around GBP360 million per year in the fourth full year after completion. It expects to generate revenue synergies with a total value of GBP1.6 billion from the acquisition.
The deal is expected to add to BT's free cash flow per share in the first full year after completion. As a result of EE's high depreciation charge, it is expected to add to adjusted earnings per share one year later.
The acquisition is subject to approval by BT shareholders and authorities, it is expected to be completed before the end of BT's 2016 financial year.
In a separate announcement Thursday, EE said it expects the deal to close by March 2016.
"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," said Chief Executive Gavin Patterson in a statement.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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