Verizon Communications NYSE:VZ and BT Group (BTGOF) have agreed to form a new joint venture combining their international businesses, creating a platform with about $4 billion in annual revenue. Under the deal, Verizon will make a $625 million equalization payment to BT, while both companies will hold equal voting rights in the venture. The transaction remains subject to regulatory approval.

For BT, the deal could mark an important step in simplifying a business that has pressured growth for years. Its international unit serves multinational corporations across about 180 countries, but many contracts have produced limited profit while remaining expensive to maintain. BT has also cut its 2027 adjusted revenue guidance to 17.1 billion17.6 billion from 19 billion19.5 billion, while adjusted EBITDA is now expected at 8.1 billion8.2 billion.

Investors may see the transaction as part of a broader reset for both telecom groups. BT shares rose 1.3% to 197.50 pence in London and are up 7.3% this year, valuing the company at 19.7 billion. Verizon closed at $46.54 in New York and has gained 14% this year, giving it a market value of $194.3 billion. New Street Research analyst James Ratzer said the balancing payment implies a generous sale multiple of more than ten times EBITDA, describing the deal as a neat and attractive exit for BT.