Orange and Deutsche Telekom reached an agreement with BT for the divestment of 100% of their shares in EE
Orange and Deutsche Telekom AG announced today that they have reached an agreement with BT Group plc (BT) to sell 100% of their shares in EE, their joint venture in the United Kingdom.
In line with the terms of the exclusivity agreement, the parties agreed on an enterprise value of £12.5 billion (approx. €16.7bn), corresponding to a multiple of 7.9x EE 2014 adjusted EBITDA. As a result of the transaction, and following the issue of new BT shares to Orange and DT, Orange will receive approx. £3.4bn (approx. €4.6bn) in cash and a 4% stake in the combined BT/EE entity. The final amount of cash received by Orange will be subject to customary adjustments at the time of closing.
The proposed transaction represents an attractive financial proposal for Orange and its shareholders, crystallizing the value of the successful creation and development of EE since its formation as a JV uniting Orange UK and T-Mobile UK. In holding a 4% stake in the new BT/EE, Orange remains exposed to further upside through the realization of synergies and more generally through the commercial success of the company. A lock-up period of 12 months for in market sales has been agreed for the BT shares held by Orange.
The transaction is subject to approval by the shareholders of BT and clearance by the relevant authorities. It is expected to close by March 2016.
Upon completion, the combination of BT and EE will create UK’s leading communications provider, offering customers innovative, seamless services that combine the power of fibre broadband, with wi-fi and advanced mobile capabilities.
Orange Chief Executive Officer Stéphane Richard said: “This agreement with BT enables us to successfully monetize more than five years of effort to create, together with our partner Deutsche Telekom, Britain’s leading mobile operator, EE. For Orange, this operation will enable us to reinforce our balance sheet, thereby providing us with additional room for manoeuvre across our markets. By retaining a significant stake in BT, we will also stand to benefit from the synergies of this operation that will lead to the creation of the leading convergent fixed and mobile operator in the UK.”
EE was formed in 2010 from the merger of Orange and DT’s operations in the UK: Orange UK and T-Mobile UK. The company posted revenues of £6.3bn in 2014, has approximately 13,000 employees and 580 retail stores, and serves more than 30 million customers across its mobile, fixed and wholesale businesses.
This press release contains "forward-looking statements". Forward-looking statements are statements that are not historical facts, including statements concerning the anticipated timing of events; any statements of expectation – notably by reason of a partial payment in shares – or belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements involve inherent risks, uncertainties and assumptions, including, without limitation, uncertainty as to whether BT will receive the necessary regulatory approvals or Orange, Deutsche Telekom and BT Group complete the contemplated transaction; the possibility that expected benefits may not materialize as expected; and other risks and uncertainties that are beyond the parties’ control. If such risks or uncertainties materialize or such assumptions prove incorrect, actual results could differ materially from those expressed or implied by such forward-looking statements and assumptions
The forward-looking statements contained in this press release are made as of the date hereof.
The distribution of this press release may be restricted by law in certain jurisdictions. Persons into whose possession this document comes are required to inform themselves about and to observe any such restrictions and if a transaction is agreed, approval by BT’s shareholders will be required as a condition of the purchase.
Orange is one of the world’s leading telecommunications operators with sales of 40,9 billion euros in 2016 and 155,000 employees worldwide at 31 December 2016, including 96,000 employees in France. Present in 29 countries, the Group has a total customer base of 263 million customers worldwide at 31 December 2016, including 202 million mobile customers and 18 million fixed broadband customers. Orange is also a leading provider of global IT and telecommunication services to multinational companies, under the brand Orange Business Services. In March 2015, the Group presented its new strategic plan “Essentials2020” which places customer experience at the heart of its strategy with the aim of allowing them to benefit fully from the digital universe and the power of its new generation networks.
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