BT Group and Verizon Communications announced plans to merge their international operations into a joint venture valued at approximately $4 billion, marking a strategic shift for both companies towards focusing on their domestic markets. The agreement includes Verizon paying BT a $625 million equalisation payment to balance ownership and valuation disparities, with each company holding a 50% stake in the new entity.
The joint venture will provide services to over 3,000 multinational clients across more than 180 countries. The combined operation aims to leverage the companies’ complementary network infrastructures and customer bases to deliver enhanced global connectivity solutions, particularly designed for a cloud-first, AI-driven environment. The new company will be headquartered in the UK with telecom industry veteran Martijn Blanken appointed as CEO-designate, joining BT ahead of the expected 2027 closing.
BT’s decision to form the joint venture follows a prolonged period of challenges in its international business, which has underperformed and weighed on overall growth. The international division, which caters primarily to large corporations and public sector clients, reported adjusted revenues of £2.1 billion last year—a 15% decline—and a loss of £117 million. BT has been gradually scaling back its overseas operations, recently divesting its Italian business and agreeing to sell its Irish wholesale and enterprise unit, while also exiting Latin America and the US markets.
The transaction aligns with BT chief executive Allison Kirkby’s strategy to refocus the company on its domestic UK market and simplify its business model. Since assuming leadership in 2024, Kirkby has accelerated cost-cutting efforts, including plans to reduce expenses by £3.7 billion over four years and cut up to 55,000 jobs globally. The joint venture will see BT’s international division classified as a discontinued operation in financial reporting, potentially improving overall visibility of the company’s core UK-focused segments.
Verizon, under CEO Dan Schulman, who took charge in October 2024 with a mandate to cut costs and drive a turnaround, is also reducing its workforce. Schulman described the joint venture as a clear solution to meet the evolving demands of multinational customers for secure, flexible connectivity across borders and cloud-based environments.
While the deal aims to bring benefits through scale and combined expertise, BT’s history with joint ventures has been mixed. A previous 50-50 partnership with AT&T in the late 1990s ended in losses and dissolution after three years, and a more recent joint venture with Warner Bros Discovery, involving BT Sport (now TNT Sports), resulted in a costly write-down.
Analysts suggest the equalisation payment reflects an attractive valuation for BT’s international assets, potentially exceeding a tenfold multiple of earnings, and some view the deal as a step towards a more complete exit from the international segment. Both companies have not disclosed potential cost savings or job impacts resulting from the joint venture.
The formation of this new entity represents a notable shift in the global telecom landscape, emphasizing prioritization of core home markets and collaboration to address the increasing complexity of international connectivity demands.