LONDON (AP) — British telecommunications company BT PLC has taken a big step back into the world of cellular after agreeing Thursday to buy the country's largest mobile operator, EE, for 12.5 billion pounds ($18.9 billion).
The deal gives BT access to EE's 31 million customers, including 24.5 million direct mobile customers and 834,000 fixed broadband customers. It also marks a change of course for the company, which left the mobile phone business in 2001 as it looked to push on with its broadband expansion.
"This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them," said BT's CEO Gavin Patterson.
The transaction will be financed by a combination of cash, debt and new shares.
BT said it will partly finance the deal with a 1 billion-pound share sale and will take on EE's debt, which is estimated to be 2.3 billion pounds. EE's current owners, Deutsche Telekom and Orange, will also each receive the equivalent of 5.1 billion pounds. Deutsche Telekom will get new shares equal to 12 percent of BT and a small cash payment, while Orange will receive a 4 percent stake and 3.4 billion pounds in cash. Deutsche Telekom will also gain a seat on BT's board.
The deal needs the approval of shareholders and the U.K. Competition and Markets Authority. It is expected to be completed by the end of the 2015/2016 financial year.
The deal will combine BT's fiber-optic network with EE's mobile network so they can sell more bundled services as demand for music and video streaming increases.
"Mobile devices are increasingly being used for data services, rather than just voice and text," BT said in a statement. "People are becoming more reliant on access to data whether in their home or business location, or on the move. The lines between fixed and mobile are blurring as people increasingly rely on tablets and smartphones to access data services."