- BT to pay £400 million for TalkTalk consumer and wholesale businesses
- TalkTalk had been seeking buyer following financial difficulties
- UK govt intervenes to speed up BT/TalkTalk regulatory review to protect consumers
LONDON, Oct 5 (Reuters) - Britain's BT Group acquired TalkTalk's consumer and wholesale businesses out of administration, it said on Monday, in a bid to rescue the broadband operator and protect 2.5 million customers from losing services.
BT, Britain's largest telecoms provider, said it would pay about £400 million ($528.40 million) for the purchase and other costs.
Given concerns that TalkTalk would fail, putting customers' broadband connections at risk, the government intervened on Monday to accelerate regulatory approval of the deal.
TalkTalk had been seeking a buyer for its consumer and wholesale businesses following financial difficulties, but an extensive sales process had failed to deliver an agreement for the whole business before BT reached a deal to acquire the company.
"BT acquiring TalkTalk is now the only viable option to keep millions of customers connected and supported," BT chief executive Allison Kirkby said in a statement.
The deal will face scrutiny by regulators as BT owns consumer brands BT, EE and Plusnet as well as Openreach, Britain's largest fixed-line network operator.
British culture minister Lisa Nandy issued a Public Interest Intervention Notice (PIIN) on Monday that should speed up the regulatory review, saying a collapse of TalkTalk could disrupt vital phone and broadband services, posing risks to public services and vulnerable customers. The notice will bring public interest concerns as well as competition concerns into consideration.
Nandy's department said TalkTalk's networks supported critical communications infrastructure including emergency service calls, hospital and ambulance communications, and medical alarm systems.
The PIIN means the Competition and Markets Authority will assess competition issues before reporting back to Nandy by October 19, after which she will consider wider public-interest concerns.
BT said it expects a regulatory review of the deal to take place over the coming weeks, pending which TalkTalk and BT will operate separately and continue to compete.
Openreach and TalkTalk have a longstanding wholesale relationship, with TalkTalk among Openreach's largest customers.
TalkTalk relies on Openreach's network to supply fixed-line and fibre services to consumers and businesses across the UK.
($1 = 0.7570 pounds)
Reporting by Neeshita Beura, Yamini Kalia in Bengaluru and Sam Tabahriti in London; Editing by Nivedita Bhattacharjee and Susan Fenton
Source: Reuters