Telecom giant BT to buy UK’s wireless carrier EE for $19 bn

To issue $1.5 bn in new shares to help finance deal

The British telecommunications giant BT agreed on Thursday to buy EE, the British mobile telephone business of Orange of France and Deutsche Telekom of Germany, for 12.5 billion pounds, or about $19 billion.

The deal is the latest in a series of takeovers in Europe’s fast-consolidating telecom sector. The parties announced late last year that they were in exclusive talks.

By adding EE’s 31 million British customers to it existing operations, BT will be able to offer so-called quad-play packages that combine broadband, cellphone, fixed-line and pay-TV services.

Under the terms of the cash-and-stock deal, BT said Deutsche Telekom would hold a 12% stake in the former British monopoly, and that Orange would retain a 4% holding once the takeover was complete.

BT said it would pay the remainder in cash and issue about $1.5 billion in new shares to help finance the takeover.

“This is a major milestone for BT,” Gavin Patterson, the company’s chief executive, said in a statement. “The UK’s leading 4G network will now dovetail with the UK’s biggest fiber network.”

The deal marks a return to the mobile market for BT, which once ran its own network — BT Cellnet — that Telefónica of Spain bought for roughly $28 billion after BT spun off the unit more than a decade ago.

BT currently offers traditional home phone services, as well as broadband and television across Britain, but it has been looking to re-enter the cellphone market as consumers increasingly want to combine their cellphone, cable and pay-TV contacts into a single bundle.

Competition in Britain’s telecommunications market has heated up recently.

Hutchison Whampoa, one of the flagship companies of the Hong Kong billionaire Li Ka-shing, said last month that it had agreed  to enter exclusive talks to buy O2, the British cellphone carrier owned by Telefónica, in a deal worth roughly $15 billion. O2 had previously held discussions with BT, but those talks broke down.

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