Deutsche Telekom’s T-Mobile and France Telecom’s Orange have announced that they have received regulatory approvals to merge their UK businesses, a move that will create the country’s largest mobile operator. The firms announced in a joint statement today that the successful completion of the merger will lead to the formation of a new joint venture company that will come into force this month. Tom Alexander, former CEO of Orange UK, will become CEO of the new company, while Richard Moat, the former CEO of T-Mobile UK, becomes CFO and deputy CEO. A Board of Directors has also been formed, on which Alexander and Moat will both serve as executive directors. Tim Höttges, CFO of Deutsche Telekom, will lead the board as non-executive chairman for two years, after which France Telecom’s deputy CEO and CFO Gervais Pellissier will take over.

Announced in September 2009, the Orange UK/T-Mobile UK merger – dubbed ‘T-Orange’ by some – will create a mobile operator with around 29 million customers, giving it an approximate 37 percent UK market share, pushing current market-leader Telefonica O2 into second place (on 28 percent) and Vodafone into third (23 percent). The merged business will have pro forma (2008) revenues of approximately EUR9.4 billion (£7.7 billion) and EBITDA of EUR2.1 billion (£1.7 billion). The operators said the merger will create net opex and capex savings in excess of £3.5 billion in total. Integration is expected to take 18 months following approval of the deal by the authorities and will cost around £600 million to £800 million. Both operators’ brands will be maintained for this period with a new brand strategy scheduled to be introduced in the first half of 2012.