BT Group in talks to buy O2 mobile network from Telefonica for $7.5 bn
25 November 2014
British telecom giant BT Group Plc today confirmed media reports that it is in talks with Spain's Telefonica to acquire its O2 mobile network as part of its recent strategy to re-enter the mobile network business.
Media reports had yesterday said that BT was in talks to buy the O2 mobile network from Telefonica and may pay at least €6 billion ($7.5 billion).
''We have received expressions of interest from shareholders in two UK mobile network operators, of which one is O2, about a possible transaction in which BT would acquire their UK mobile business. All discussions are at a highly preliminary stage and there can be no certainty that any transaction will occur,'' BT said in a release.
''We continue to develop our own plans for providing enhanced mobile services to business and consumer customers, in line with our previous announcements. We remain confident of delivering on these plans and have also been exploring ways of accelerating them, including assessing the merits of an acquisition of a mobile network operator in the UK,'' the release added.
"Telefonica informs that, although it is in talks with British Telecom, these talks are in a highly preliminary phase and there is no certainty that a transaction will take place," Telefonica said in a statement to the Spanish stock market.
Spanish newspaper El Confidencial had yesterday reported that BT could offer at least €6 billion to Telefonica on top of a 20-per cent stake in its share capital for the O2 mobile network, taking the total deal value to around €14 billion.
A successful deal would bring O2 back to BT's fold after the London-based company sold it to Telefonica in 2006 for £18 billion as part of its restructuring.
O2, then known as Cellnet, was formed as a 60:40 joint venture in 1985 between BT and British telecom company Securicor. BT acquired Securicor's 40-per cent stake in Cellnet in 1999 and renamed it BT Cellnet and later to O2.
O2 runs 2G, 3G and 4G networks across the UK, as well as O2 Wifi and owns half of Tesco Mobile. It has over 450 retail stores, over 23 million customers and holds 26.2 per cent market share.