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Telecoms group BT says in talks to buy EE for £12.5b
[LONDON] BT Group, the British telecoms and TV company, said on Monday it was in exclusive talks to purchase mobile operator EE for £12.5 billion (S$25.7 billion).
EE is a British mobile phone brand operated by French company Orange and Deutsche Telekom of Germany.
"BT Group plc announces that... it has entered into an exclusivity agreement with Deutsche Telekom and Orange in relation to BT's possible acquisition of all of their UK mobile business, EE," said a statement that gave "a purchase price of £12.5 billion".
A deal would lead to Deutsche Telekom holding a 12-per cent stake in BT, while being allowed to appoint one member of the BT board. Orange would hold a 4.0-per cent stake in BT, the statement said.
"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," it added.
Back in 2002, BT demerged its domestic mobile phone division O2, before selling it to Spanish giant Telefonica in 2005 for £17.7 billion.
BT is looking to get back into the mobile phone market amid industry consolidation - and following its recent entry into television that has seen it go head-to-head with British rival BSkyB over the screening of live English Premier League football.
By offering customers a mobile phone service, BT will be able to match other rivals in Britain such as Virgin Media that provide 'quad play' bundles comprising fixed and mobile phone services along with broadband Internet and pay-television.
"While continuing these exclusive discussions, BT will progress its own plans for providing enhanced fixed-mobile converged services for businesses and consumers, in line with previous announcements," the British group said.
"The exclusivity agreement does not require the parties to enter into a transaction and there can be no assurances that one will occur," the statement said, adding that any deal would need shareholder approval.
Should a deal materialise, BT said it expects "significant" cost savings going forward mainly as a result of shared network and IT systems.
BT had last month disclosed that it was in "preliminary" talks to buy back O2, while adding that it had been approached by another operator, thought to have been EE.
Monday's announcement came after the close of trading in London, which saw BT shares rise 0.15 per cent to 398 pence.
The four biggest mobile phone groups in Britain are O2, EE, Vodafone and Three, which is owned by Hong Kong's Hutchison Whampoa.