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BT Group has acquired TalkTalk Telecommunications and PlatformX Communications out of administration to ensure service continuity for their 2.5 million customers, including vulnerable households and critical services. <\/p>\n
While TalkTalk reported revenues of around \u00a31.2 billion in the last 12 months and was loss-making, BT expects the acquisition to become value accretive over time through integration and synergies. <\/p>\n
A regulatory review is anticipated in the coming weeks, during which TalkTalk and BT will operate separately. BT reaffirms its FY27 and multi-year financial outlook metrics, excluding the effects of this transaction.<\/p>\n
The deal follows a prolonged, but ultimately unsuccessful, sale process for TalkTalk\u2019s consumer and wholesale (PXC) operations.<\/p>\n
BT said it recognised the risk to the country, and especially vulnerable customers and key public services, should the company collapse.<\/p>\n
It therefore approached the directors of TalkTalk and offered to step in immediately, in the public interest, to protect customers and critical national infrastructure.<\/p>\n
By acquiring the business out of administration, BT will be providing much-needed and immediate reassurance for TalkTalk\u2019s employees, its 1.5 million retail customers and its 1 million wholesale customers across the UK. <\/p>\n
This includes vulnerable households, and connections that support critical national infrastructure providers across health, emergency services, defence, education, transport, banking and government.<\/p>\n
Allison Kirkby, chief executive of BT Group, said: \u201cThis is a genuinely unprecedented situation, where millions of citizens and businesses were at risk if TalkTalk had collapsed. <\/p>\n
\u201cBT is the digital backbone of the country, with a presence in every postcode. We have been connecting the nation for generations, stepping up in the moments that matter, and BT acquiring TalkTalk is now the only viable option to keep millions of customers connected and supported.<\/p>\n
\u201cOur immediate priority is to stabilise the business and provide a safety net for the households and businesses who rely on TalkTalk. Once the regulatory process has been concluded, TalkTalk\u2019s customers will benefit from access to the UK\u2019s best network, and the full range of market-leading products and services that BT offers. And, over a period of time, the transaction will create value for all our stakeholders \u2013 customers, colleagues, the country, and our owners.\u201d<\/p>\n
BT has also confirmed that Clive Selley, with immediate effect, will lead the stabilisation and integration planning of the acquisition. Martijn Blanken will take over Mr Selley\u2019s role as CEO of BT International, in addition to being CEO-designate of BT\u2019s proposed international joint venture with Verizon.<\/p>\n
BT is today reconfirming all FY27 and multi-year financial outlook metrics, including the inflection in Normalised Free Cash Flow to c\u00a32.0bn in the current year, FY27, and to c\u00a33bn by the end of the decade excluding the effects of this transaction.<\/p>\n
Specifically, for FY27 BT will report the acquired business as a separate reportable segment. The estimate of the total cash impact of the acquisition in FY27 is c\u00a3400m, comprising consideration, transaction and administration costs, working capital impacts as well as a trading loss for the balance of this fiscal year of c\u00a360m and non-receipt of c\u00a3100m otherwise due to Openreach.<\/p>\n
BT will provide further details on the effects of the acquisition on revenue, EBITDA and capex following alignment of TalkTalk\u2019s financial reporting to BT\u2019s accounting policies and completion of acquisition accounting later this fiscal year.<\/p>\n
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