BT and Verizon Announce Joint Venture
BT has agreed a deal with US mobile phone firm Verizon to merge their international businesses, creating a joint venture with annual sales of around four billion US dollars (£3 billion). Under the deal, Verizon will pay a so-called equalisation payment of 625 million US dollars (£473 million) to BT, and both firms will be equal shareholders in the combined company. The joint venture will serve more than 3,000 customers across over 180 countries.
BT's Strategic Shift
BT has been aiming to spin off its struggling international business for some time as it looks to refocus on the group’s domestic UK market, having carved out the division as a standalone unit with around 8,000 employees last July. It has been gradually reducing its overseas business as part of wider cost-cutting plans, recently selling off its troubled Italian business and previously agreeing the sale of its Irish wholesale and enterprise business unit. BT recently unveiled plans to increase group-wide cost cutting to £3.7 billion over the next four years, with up to 55,000 jobs worldwide being axed as part of the overhaul.
Verizon's Cost-Cutting
Verizon has also been slashing costs, announcing plans in November to cut more than 13,000 jobs across the group. Dan Schulman, chief executive of Verizon, said: “Our international customers require secure, flexible connectivity that works seamlessly across borders and cloud environments. When we thought about how to best support them, this joint venture was the clear answer.”
Leadership and Details
Allison Kirkby, chief executive of BT Group, said: “Today’s announcement marks a major milestone for BT International, and an important step forward for BT as a whole, as we deliver on our UK-focused strategy.” She said the move will bring together BT’s “expertise and heritage with Verizon’s deep relationships with multinationals”. The tie-up with Verizon will be incorporated in Jersey but headquartered and tax resident in the UK. It will be headed up by Martijn Blanken, a former executive at Australian telecoms firm Telstra, who has been appointed chief executive designate and is set to join BT on September 1 ahead of the deal completing, which is expected in 2027. Clive Selley will continue to lead BT International as chief executive ahead of the transaction, while Verizon’s leadership remains unchanged with both businesses operating independently until the deal completes. The two companies did not disclose any potential cost reductions that may be made after the joint venture is formed, while the name of the new company is also yet to be confirmed.
