BT moves fast on £12.5B EE deal following CMA green light - Mobile World Live

BT moves fast on £12.5B EE deal following CMA green light

15 JAN 2016

Following the Competition and Markets Authority’s decision to clear its takeover of UK mobile operator EE without conditions, BT said the deal will close on 29 January as interest shifts to what future there is for the EE brand.

The company will issue a prospectus in the week starting 25 January with the deal scheduled to close four days later when Deutsche Telekom and Orange – EE’s owners – receive shares in BT. And Deutsche Telekom will get a seat on the UK incumbent’s board.

BT also hinted at a delicate debate over what happens to the well-known EE brand. Will it be maintained or subsumed within BT? “There will be a distinct EE line of business following completion of the acquisition,” said the company’s statement without further elaboration.

CCS Insight analyst Kester Mann argued that BT should tread carefully when it comes to the EE branding.  “It seems inevitable that BT will move to replace the EE name, but it shouldn’t rush to do so. EE has benefitted from strong investment to become synonymous with widespread 4G coverage, and awareness continues to improve,” he wrote in a blog.

“A greater priority for BT will be the complex task of reworking back-end and billing systems as it merges the UK’s largest fixed-line and mobile operators, and only then should it start to articulate changes to consumers,” he added.

BT also confirmed that Marc Allera, EE’s chief commercial officer, will be the mobile operator’s next CEO, taking over from Olaf Swantee once the deal has closed.

Following completion, Deutsche Telekom will have a 12 per cent stake in the UK’s incumbent. Appointment of its board representative will happen “in due course” and follows comments by BT chairman Mike Rake that the UK firm and the German giant will look at ways of working together.  Orange will have a four per cent stake in BT but no board level representation.

BT also said it will announce its next quarterly report for Q3 2015/16 results on February 1.

Earlier, the CMA approved the BT-EE deal without conditions. The competition regulator decided the takeover would not reduce competition in any market in the UK, including retail mobile, wholesale mobile, mobile backhaul, wholesale broadband and retail broadband services. The regulator cleared the deal on a provisional basis in October last year.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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