LONDON (Reuters) - BT (L:BT) said on Thursday it would raise 1 billion pounds ($1.5 billion) through a placing of new shares to fund its 12.5 billion pounds ($19 billion) acquisition of mobile operator EE.
The group, the country's biggest fixed-line telecoms provider, had spent the last few weeks in exclusive talks with the owners of EE, Orange (PA:ORAN) and Deutsche Telekom (DE:DTEGn), about a deal.
BT said on Thursday it would fund the cash and shares deal through new debt and the placing. Following the transaction, Deutsche will hold a 12 percent stake in BT and Orange will hold a 4 percent stake.
"This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them," BT Chief Executive Gavin Patterson said.
"The UK's leading 4G network will now dovetail with the UK's biggest fiber network, helping to create the leading converged communications provider in the UK."
BT had said that by buying the country's biggest superfast mobile network it would accelerate its plans to give retail customers seamless access to the Internet whether via fiber broadband in buildings or with wi-fi hotspots and 4G mobile services.
It expects to achieve combined operating cost and capital investment savings of around 360 million pounds per year in the fourth full year and it also expects to generate revenue synergies with a total net present value of around 1.6 billion pounds.
Separately, EE said its 4G customer base had risen to 7.7 million subscribers, beating it 6 million end-of-year target. It also reported a 0.2 percent drop in full-year operating revenue excluding the effect of regulation.
($1 = 0.6583 pounds)