Digitaltveurope.com

BT has struck a definitive agreement to buy UK mobile operator EE for £12.5 billion (€16.7 billion), in a deal that will see the UK service provider make a major move into the quad-play market.

BT said that the deal will allow it to offer fibre broadband, WiFi and advanced mobile capabilities, while increasing its capacity for future investment and product innovation.

The buyout will see Orange and Deutsche Telekom sell 100% of their shares in EE – their joint venture in the UK. Following the transaction Deutsche Telekom will hold a 12% stake in BT and will be entitled to appoint one non-executive member of the BT board of Directors, while Orange will hold a 4% stake in BT.

“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 BT CEO Gavin Patterson.

BT said that the EE deal could generate “considerable value for shareholders” and that it expects to achieve combined operating cost and capex synergies of around £360m per year in the fourth full year after completion.

Deutsche Telekom CEO Tim Höttges 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. We will be the largest individual shareholder in BT and are laying the foundations for our two companies to be able to work together in the future.”

EE Chief Executive Olaf Swantee said that the deal will bring “even more innovation and investment in world leading connectivity,” while Orange CEO Stéphane Richard added that the deal marked the “next natural step in the evolution of BT and EE.”

BT first announced that it was in exclusive talks to buy EE for £12.5 billion back in December. EE is the leading mobile network operator in the UK with 31m customers. It also claims to have the largest 4G customer base of any operator in Europe.

The transaction is subject to approval by BT shareholders and clearance by the relevant authorities. It is expected to close by March 2016.