BT has confirmed that it has entered into an exclusivity agreement with Deutsche Telekom and Orange over the possible acquisition of EE.
“The period of exclusivity will last several weeks allowing BT to complete its due diligence and for negotiations on a definitive agreement to be concluded,” BT said in a statement. "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 fibre broadband, Wi-Fi and 4G."
The telco has been looking to re-enter the cellular space for some time; with a monopoly on fixed-line, broadband and Wi-Fi hotspots, mobile has been the missing part of the puzzle since it sold off O2 in 2005.
The successful acquisition of EE, formerly known as Everything Everywhere – and before that Orange and T-Mobile, would see BT take ownership and the largest 4G network in the UK. Combined with the £186m of 2.6 GHz spectrum scooped in the 4G auction, BT would have – by far and away – the most formidable network in the UK.
The non-binding terms include a purchase price of a whopping £12.5bn on a debt and cash free basis. The deal would comprise of a combination of cash and BT ordinary shares issued to Deutsche Telekom and Orange. Deutsche Telekom, the parent company behind T-Mobile, would hold a 12% stake in BT and would be eligible to appoint someone to the BT board of directors. Orange would hold a not-insignificant 4% in the telecoms giant.