BT Group PLC (LSE:BT.A) and Verizon Communications Inc (NYSE:VZ, XETRA:BAC) have agreed to combine their international operations into a 50:50 joint venture aimed at serving large multinational customers.
The new company will bring together BT International with the international enterprise wireline arm of Verizon, the US telecommunications group.
It is expected to serve more than 3,000 customers across more than 180 countries, generating roughly $4 billion in combined annual revenue.
Both parents will hold equal voting rights, with Verizon agreeing to pay BT a $625 million equalisation payment.
The venture is being pitched as a platform built for a cloud-first world, with the two sides emphasising secure and resilient connectivity designed to meet customers' data, operational and regulatory requirements.
It will be incorporated in Jersey but headquartered and tax resident in the United Kingdom.
Martijn Blanken has been appointed chief executive-designate of the new business, conditional on completion.
Blanken brings nearly three decades in senior roles across telecommunications and digital infrastructure at Telstra, Openwave Systems, EXA Infrastructure and KPN, and will join BT from 1 September to help prepare for launch.
Clive Selley will continue to lead BT International through the transition, while Verizon's leadership is unchanged.
Allison Kirkby, chief executive of BT Group, said combining BT International's heritage with Verizon's multinational relationships would create a stronger, scaled connectivity partner with the reach and investment to succeed.
She framed the deal as a milestone for BT International and a step forward for the wider group as it delivers on its UK-focused strategy.
Dan Schulman, chief executive of Verizon, said the venture was the clearest way to give international customers secure, flexible connectivity that works across borders and cloud environments.
He added that Verizon would continue to serve those customers directly in the US.
The arrangement allows both parents to concentrate on their domestic markets while supporting the venture as equal shareholders.
The transaction is expected to complete in 2027, subject to regulatory clearances and consultation with employee representatives where required.
BT and Verizon's international businesses will continue to operate independently until then.
Separately, BT moved to update its guidance to reflect the carve-out, with its International division now treated as a discontinued operation until the deal closes.
That trims expected adjusted group revenue for the 2027 financial year to between £17.1 billion and £17.6 billion, down from £19.0 billion to £19.5 billion previously.
Adjusted UK service revenue guidance was left unchanged at £15.1 billion to £15.4 billion, underlining that the domestic business is unaffected.
Adjusted EBITDA is now forecast to grow to between £8.1 billion and £8.2 billion, excluding International, against a prior range of £8.2 billion to £8.3 billion.
Capital expenditure excluding spectrum was guided slightly lower at £4.2 billion to £4.3 billion, having previously been pegged at around £4.3 billion.
Crucially for income investors, normalised free cash flow guidance was held at about £2.0 billion.
BT also reiterated plans for low to mid-single-digit growth in its dividend.
The company's mid-term targets were left unchanged.
Those include sustained revenue growth, EBITDA rising ahead of UK service revenue, and normalised free cash flow reaching about £3.0 billion by the end of the decade.
BT has said dividend growth will continue at a low to mid-single-digit pace until its credit metrics are consistent with a BBB+ rating, after which surplus cash could fund enhanced distributions.
In early trading, the shares were up 1.25% at 197.45p.
---ADDS SHARE PRICE MOVEMENT---
