BT and Verizon to create new international business in $625mn deal
New 50:50 venture will be milestone in UK group’s strategy of refocusing on its domestic operations
BT and US mobile operator Verizon are to combine their international businesses in a new joint venture, marking a key step in the UK group’s strategy of refocusing on its domestic operations.
The deal, announced on Monday, will see Verizon pay $625mn in an equalisation fee to BT to guarantee equal voting rights in the 50:50 venture. It will create a separate company to serve more than 3,000 business customers across some 180 countries.
The sale marks the end of a series of attempts by BT to shift its 8,000-staff international unit, which it separated into a separate division for financial reporting purposes last year. It is a key moment for BT chief executive Allison Kirkby, who has set about shoring up BT’s position in the domestic broadband and mobile markets.
The division will be led by Martijn Blanken, a former Telstra executive, and will be incorporated in Jersey and headquartered and tax resident in the UK, the companies 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,” Kirkby said.
The sale of half of the international division — which provides connectivity services to businesses in around 180 countries — comes amid a wider streamlining of BT’s business by Kirkby, who in May announced she was to expand BT’s proposed cost-cutting from a target of £3bn in savings by 2029 to £3.7bn by 2030.
The moves will lead to a reduction in headcount in the FTSE 100 group from 130,000 in 2023 to about 75,000 by 2030.
For Verizon, the deal will also allow it to focus on its domestic operations, which have come under pressure from rivals including T-Mobile and AT&T.
In November Verizon said it would cut about 13,000 jobs — the largest single lay-off in its history — while it has looked to cut prices on certain mobile offers in a bid to retain customers from switching to rivals.
The transaction, which is expected to close in 2027, is subject to regulatory clearances and consultations with employee representatives in some countries.
Both companies said their international businesses would “continue to operate independently” until the transaction was officially completed.