Verizon and BT Group are merging their international businesses
What's the story
British telecom giant BT Group and US mobile company Verizon have announced a merger of their international businesses. The move ends BT's over 18-month-long search for a buyer for its overseas operations. As part of the agreement, Verizon will pay a $625 million "equalization" fee to BT, ensuring equal voting rights in the new joint venture.
Venture details
New entity to have annual revenue of $4B
The merger will create a new entity with over 3,000 customers across some 180 countries and an annual revenue of $4 billion. BT Group's CEO Allison Kirkby described the deal as an "important step forward for BT as a whole." She added that it would help deliver on their UK-focused strategy. Kirkby took charge in February 2024 and has since led a multibillion-pound cost-cutting program at BT.
Financial adjustments
BT to raise savings target to £3.7B by 2030
Kirkby recently announced that BT would raise its savings target from £3 billion by 2029 to £3.7 billion by 2030. The company's headcount is expected to be between 75,000 and 80,000 by the end of the decade. This is toward the lower end of an estimated range set out in 2023. Kirkby's pay and bonus package more than doubled last year to £5.6 million, the biggest pay award in over a decade at BT Group.
Operational changes
Verizon has also been cutting costs
Verizon has also been cutting costs and announced in November that it would cut around 13,000 jobs across the organization. Its CEO David Schulman said at the time that they needed to "simplify our operations to address the complexity and friction that slow us down and frustrate our customers." He added that the joint venture with BT would offer "a cutting-edge, AI-ready and secure platform run by a single global organization dedicated to [customer] needs."
Leadership transition
Deal still subject to regulatory approvals
The new venture will be headed by Martijn Blanken, a former executive at Australian telecom company Telstra. It will be registered in Jersey and headquartered in the UK. The deal is still subject to regulatory approvals and consultation with employee representatives in some countries. Until the transaction is officially complete, the international businesses will "operate independently," the companies said.