- BT has acquired TalkTalk Telecommunications Limited (not TalkTalk Business)
- BT has acquired PlatformX Communications Limited
- Avoids putting 2.5 million customers at risk
- The estimate of the total cash impact in FY27 is c£400m, comprising both consideration and other cash impacts
- A regulatory review of the transaction is expected to take place over the coming weeks
- Excluding the effects of the transaction, BT reconfirms all FY27 and multi-year financial outlook metrics
BT Group has acquired TalkTalk Telecommunications Limited and PlatformX Communications Limited out of the administration of TalkTalk Group on a debt-free basis. The estimate of the total cash impact in FY27 is c£400m, comprising both consideration and other cash impacts.
By acquiring the business out of administration, BT will be providing reassurance for TalkTalk’s employees, its 1.5 million retail customers and its 1 million wholesale customers across the UK.
During the last 12 months, TalkTalk reported revenues of c£1.2bn and was loss-making. Over a period of time and through the integration into BT Group, the acquisition will become value accretive as the business is stabilised and synergies are realised.
BT expects a regulatory review of the transaction to take place over the coming weeks, pending which TalkTalk and BT will operate separately and continue to compete.
Allison Kirkby, Chief Executive of BT Group, said:
“This is a genuinely unprecedented situation, where millions of citizens and businesses were at risk if TalkTalk had collapsed. BT 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.
“Our 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’s customers will benefit from access to the UK’s 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 – customers, colleagues, the country, and our owners.”
BT has also confirmed that Clive Selley CBE, with immediate effect, will lead the stabilisation and integration planning of the acquisition. Martijn Blanken will take over Clive’s role as CEO of BT International, in addition to being CEO-Designate of BT’s proposed international joint venture with Verizon.
BT is today reconfirming all FY27 and multi-year financial outlook metrics, including the inflection in Normalised Free Cash Flow to c£2.0bn in the current year, FY27, and to c£3.0bn by the end of the decade excluding the effects of this transaction.
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£400m, comprising consideration, transaction and administration costs, working capital impacts as well as a trading loss for the balance of this fiscal year of c£60m and non-receipt of c£100m otherwise due to Openreach.
BT will provide further details on the effects of the acquisition on revenue, EBITDA and capex following alignment of TalkTalk’s financial reporting to BT’s accounting policies and completion of acquisition accounting later this fiscal year.
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