BT Group’s proposed acquisition of Everything Everywhere (EE) was cleared last Friday by the United Kingdom (UK) Competition and Markets Authority (CMA), which concluded that the transaction is unlikely to lessen competition in the UK fixed and wireless communications sectors.
Completion of the £12.5 billion (US$18 billion) merger, which was announced in February 2015, would herald BT’s return to the UK wireless sector after a 15-year absence. (BT, the former UK state telecommunications monopoly, hasn’t offered facilities-based wireless service since it spun off its BT Cellnet mobile division in 2001.) EE, a joint venture owned equally by Deutsche Telekom (DT) and French carrier Orange, ranks as the top provider of mobile voice and broadband services to British customers. When combined with 4G wireless license rights acquired by BT in a 2013 spectrum auction, the EE deal will enable BT to offer a bundled package of fixed and mobile voice, broadband and video services to British customers in competition with converged service offerings launched previously by rivals Virgin Media and TalkTalk.
Noting that EE and BT, the UK’s leading provider of fixed voice and broadband services, operate in separate market segments with little or no overlap, the CMA declared, “evidence does not show that this merger is likely to cause significant harm to competition or the interests of consumers.” Upon completion of the transaction, which is now scheduled for January 29, DT and Orange, the joint owners of EE, will become shareholders of BT with respective ownership stakes of 12% and 4%. As he welcomed the CMA ruling, BT CEO Gavin Patterson predicted that “the combined BT and EE will be a digital champion for the UK, providing high levels of investment and driving innovation in a highly competitive market.”