BT tops FTSE 100 after finding new home for international business with Verizon joint venture
BT unveiled a new home for its international operations on Monday, in a move the £19.5bn firm called a “milestone”, which sent its shares to the top of the FTSE 100.
A joint venture with Verizon of the US will target multinational customers and help the former monopoly concentrate on its domestic market.
BT will receive $625m from Verizon as an “equalisation payment”. Voting rights will be evenly split between the companies.
Allison Kirkby, BT’s chief executive, had already split the former monopoly’s international division into a separate division within the firm’s financial reporting structure.
In updated earnings guidance to the stock exchange reflecting the deal, BT cut its forecast group revenue for 2027 by around £2bn.
It said the international division “will be treated as a discontinued operation in our accounts until completion”.
Monday’s deal between the twin trans-Atlantic telco giants reflects Kirkby’s priorities for the former UK monopoly.
Kirkby called it “a major milestone for BT International, and an important step forward for BT as a whole, as we deliver on our UK-focused strategy.”
Shares in BT topped the FTSE 100 leaderboard on Monday, up almost 2 per cent to 198.8p.
Industry shakeup
The deal comes as demand for artificial intelligence and cloud computing transforms the industry.
It will bring together two of its longest-established names, who will work together to connect “multinational organisations” in “a cloud-first world in the age of AI”, the firms said this morning.
It will target “more than 3,000 customers across more than 180 countries”, will be served by the 50-50 joint venture according to a statement to the stock exchange. It is expected to have combined annual revenue of around $4bn.
There will be cost savings. The statement referred to “significant scale efficiencies across the combined global network and service operations following completion” of the joint venture. Kirkby has already targeted £3.7bn in cost savings at BT by 2030 .
The new venture will be led by Martijn Blanken as chief executive. The former Telstra executive will join BT from September. Clive Selley will continue to lead BT International as its chief executive to ensure it is ready to enter the joint venture.
Verizon’s line up of senior executives will be unchanged.