BT Completes £12.5bn EE Takeover

BT has formally completed the £12.5bn takeover of mobile operator EE, uniting the UK’s biggest fixed line and mobile providers.

The transaction was first announced last year, but a ruling by the Competitions and Markets Authority (CMA) earlier this month paved the way for the deal to be concluded.

The CMA found the merger would not significantly reduce competition in any of the markets that either company operates in.

BT EE takeover complete

A number of BT and EE’s rivals raised concerns about the combined company’s power in the mobile, broadband and wholesale markets, but the CMA said it found no evidence to suggest a negative impact following a “complex, detailed and rigorous” process.

EE’s former parent companies are now major shareholders in BT, with Deutsche Telekom possessing a 12 percent stake and Orange four percent.

BT, which sold O2 to Telefonica in 2005, has returned to the mobile market in a bid to strengthen its ability to offer quad-play services and to facilitate the development of hybrid networks comprising mobile and fixed infrastructure.

Since then it has offered business mobile services for some time through MVNO agreements and now offers consumer 4G deals through its current arrangement with EE.

Network integration

The task of integrating the two networks will be overseen by BT’s new chief information officer Howard Watson. EE will continue as a distinct business within BT for the time being, led by Marc Allera, who replaces the outgoing CEO Olaf Swantee, however analysts expect the EE brand will be dropped eventually.

BT’s attention will now turn to Ofcom’s once-in-a-decade review of the UK communications market, which could see regulation of Openreach either strengthened or relaxed, while the division could be made fully independent. The company maintains the current structure is working, but rivals say it stifles investment and hands BT an unfair advantage.

Elsehwere, BT’s head of wholesale Nigel Stagg is leaving after 36 years with the company.

“I’d like to thank him on behalf of the company and I wish him all the very best for the future,” said BT CEO Gavin Patterson.