BT Group (BT.A) rose 0.86% in London trading after the British telecom group announced a 50/50 joint venture with Verizon Communications NYSE:VZ combining their international enterprise operations. Verizon will pay BT a $625 million equalisation fee to ensure equal voting rights in the new entity. The combined business is expected to serve more than 3,000 customers across more than 180 countries, with approximately $4 billion in combined annual revenue. Verizon shares were down 0.28% in premarket.
The deal ends BT's more than 18-month search for a buyer of its international operations and marks a strategic shift for CEO Allison Kirkby, who has been refocusing the company on the UK market while overseeing a cost-cutting programme targeting 3.7 billion in savings by 2030. BT's headcount is expected to fall to between 75,000 and 80,000 by the end of the decade. Martijn Blanken has been appointed CEO-designate of the new joint venture, joining BT on September 1 ahead of the transaction close. The JV will be incorporated in Jersey and headquartered and tax resident in the UK.