BT and Verizon spin off international networking arms into $4B joint venture

BT and Verizon plan to merge their overseas enterprise networking units into a 50:50 joint venture expected to generate roughly $4 billion in yearly revenue.

BT and Verizon pool overseas operations. The proposed entity will combine BT International and Verizon's international enterprise wireline business. Regulators must still approve the arrangement, after which the new firm will support more than 3,000 multinational customers in 180 countries.

Verizon will pay BT $625 million to equalize the value of assets each party is contributing. The transaction is expected to close in 2027.

Both firms refocus on core domestic markets. BT intends to sharpen its focus on Britain while Verizon concentrates on the US. The separation allows each carrier to step away from an overseas unit that has lagged behind their home-market performance.

BT's forecast for the year ending March 2027 projects £1.82 billion in international revenue against only £108 million in adjusted EBITDA. Analyst Tom Oughton at Megabuyte described BT International as "a consistent underperformer" and highlighted the gap between its 5.9 percent international EBITDA margin and the 47 percent recorded in the UK.

Official rationale centers on scale and AI. The companies claim the tie-up will assist multinational clients in managing cloud infrastructure and increasingly complex data residency rules. BT chief executive Allison Kirkby said the venture would create "a stronger, scaled connectivity partner" offering platforms "designed for the age of AI."

Verizon chief executive Dan Schulman called the new business a "cutting-edge, AI-ready and secure platform." The joint venture will be incorporated in Jersey yet headquartered and tax-resident in the UK.

New leadership and unchanged customer service until close. Martijn Blanken, formerly chief executive of EXA Infrastructure, has been appointed CEO-designate. BT International chief executive Clive Selley will stay in his current role until the transaction completes.

Clients should experience no immediate disruption because the two international operations will keep running separately pending regulatory clearance. BT restated its goal of doubling free cash flow to £3 billion by the end of the decade after adjusting guidance for the carve-out.