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  • 💸 Why BT's "50:50" deal isn't actually equal

💸 Why BT's "50:50" deal isn't actually equal

Author

Idin Sabahipour
July 01, 2026

Contents

If you take just one thing from this email...

This week BT and Verizon, two of the biggest telecoms companies in the UK and US, agreed to combine their international businesses. Rather than merging into one company, they each put only their international arm into a brand-new business they own 50:50 – a joint venture – while keeping their home businesses separate. The benefit is that a joint venture lets two companies share the cost and risk of one part of what they do without putting their whole company at stake, which is why it is often a safer step than a full merger.

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💸 Why BT's "50:50" deal isn't actually equal

What’s going on here?

This week, BT (the UK telecoms group) and Verizon (one of America's largest telecoms companies) agreed to combine their international businesses into a 50:50 joint venture.

What’s a joint venture?

A joint venture is when two companies each put part of their business into a brand-new company that they own together, sharing the profits, costs and risks of running it. They don't have to own it equally – the split can be 50:50, 70:30, or whatever they agree (though BT and Verizon went with an even 50:50).

It's not the only way for two companies to combine. The better-known route is a merger, where they fuse into a single company. The two are easy to mix up, but they're different👇

Joint venture

Merger

What is it?

Two companies put part of their businesses into a brand-new company they own together.

Each company keeps control of everything it didn't put in and carries that part on as normal.

Two companies fully combine into one. Either one absorbs the other in an acquisition (and keeps its name) or both fuse into a new company where neither name survives.

Either way, they stop being two separate businesses.

✅ Positives

It's lower stakes. Each side only commits part of its business.

They get some of the benefits of a merger, like shared costs and expertise, but if it doesn't work, it's usually easy to unwind.

A merger brings greater cost savings and synergies – extra value the two create together that neither could alone, like selling to each other's customers.

And there's no partner to split the profits with.

❌ Negatives

Control is shared. Both owners have to agree on the big decisions, which can slow things down or lead to deadlock if they can’t agree.

Also whatever the venture earns gets divided between them, rather than kept in full.

A merger is hard to undo. Once the two are fused together, pulling them apart is slow and expensive – so if they turn out to be a bad fit, the whole company suffers.

The regulatory and cultural hurdles are higher too.

🧠 Technically, “mergers” don’t exist in English law

People use the word all the time – UK law firms have “M&A” teams (which stands for mergers and acquisitions).

But the UK doesn’t have a legal procedure that fuses two companies into one, the way the US and EU do.

What gets called a "merger" here is really one company buying the other, or a court-approved deal that combines them. So when we say “merger”, picture that – two businesses ending up as one, just technically built through a purchase rather than a true legal fusion.

Rather than one buying the other, BT and Verizon are each putting their international arm – the part that sells phone, internet and network services to big multinational companies around the world – into a shared company they split 50:50.

Each keeps its home business (BT in the UK, and Verizon in the US).

Why does this joint venture make business sense for BT and Verizon?

The joint venture makes sense for both sides for three reasons.

  1. 🏠 Both companies want to focus on their home markets. BT wants to concentrate on the UK, where it sells broadband, mobile and business services. Running a network across 180 countries is complicated and hard to manage alongside its UK business. BT spent more than 18 months looking for someone to share or take over this arm, talking to AT&T and Orange before this deal. Verizon has a similar goal. It wants to keep most of its attention on the US, rather than trying to build a market in Europe from scratch.

  2. 📈 Being bigger helps them win bigger deals. The new joint venture wants to win contracts from huge companies that operate worldwide. A bank might have offices in 60 countries, or a car company could have factories across several continents. Those businesses don't want a different provider in every country – they want one that can connect all their sites. So the more countries BT and Verizon cover, the more likely they are to win. Being bigger also makes the network cheaper to run for each customer. A worldwide network costs a lot to build and maintain, but that bill barely changes whether 100 companies use it or 100,000. So the more customers BT and Verizon sign up, the more people there are to share that cost – a bit like splitting a taxi fare, where the more people pile in, the less each person pays.

  3. 🌍 Each is strong in different parts of the world, so they don't compete heavily. Verizon is stronger across North and Central America, with more network infrastructure and close ties to major US companies. BT is stronger across Europe and Asia. Since there’s little overlap, the two fit together well to create a large reach. Because their territories barely overlap, the two slot together like puzzle pieces: Verizon's Americas next to BT's Europe and Asia adds up to almost the whole world. And since they aren't both running networks in the same places, they're not paying twice for the same areas.

How are BT and Verizon making the 50:50 split work?

A 50:50 joint venture sounds simple. Both sides own half, so they split everything down the middle.

But an equal split is only fair if both sides put in equal value. If one company brings more than the other, giving both the same voting rights and the same share of the profits short-changes the bigger contributor.

🤔 What are voting rights?

A company is split into slices called shares, and each share normally carries one vote.

Those votes are your voting rights – your say on big decisions, like who runs the company or whether to approve a major deal. The more shares you own, the more votes you get – and the bigger your slice of the profits.

In a 50:50 split, each side holds half the votes, so neither can push a decision through alone.

So which company is putting more into the joint venture? The exact value of each business isn’t public. But there’s a cash payment that gives a strong clue.

To enter into the joint venture, Verizon is paying BT $625 million. That’s called an equalisation payment: a one-off payment used when one side is contributing a more valuable business, but both sides will still own 50%.

Think of it like this. Say you and your friend start a plumbing company together and agree to own it 50:50. You bring your van and a customer list, which together are worth £100,000. Your friend puts in tools and equipment worth £75,000. Splitting it half-and-half isn't fair – you've put in £25,000 more. So to even things up, your friend pays you £12,500 in cash (that’s half of the difference). This now closes the gap, and you've now each contributed the same. That extra cash they gave was the “equalisation payment”.

So it seems that BT is putting in the larger business. Verizon is paying $625 million to make up the difference so that both companies can still own half of the joint venture and have equal voting rights.

When will the deal complete?

Although it’s been agreed (or “signed”), this won’t complete until 2027.

🤔 What is completion?

Signing and completion aren't the same thing.

Signing is when both sides agree and sign the contract. Completion is when the deal actually happens – the money is paid, ownership changes hands, and the new joint venture starts operating.

There's sometimes a gap between the two, because some things must happen first. These are called conditions precedent – requirements to meet before the deal can go ahead, like shareholder approval, arranging the money, or a regulator's permission.

Until they're met, the deal is signed but can’t be completed.

Before the deal can go ahead, BT and Verizon need permission from several different authorities. Here are two steps that might become bottlenecks.

🌍 Competition checks in the countries that matter. Most countries have competition law (in the US, it’s called "antitrust") to stop deals that leave customers worse off through higher prices or less choice. Many have a regulator to enforce it – the CMA in the UK, the FTC and DOJ in the US.

The joint venture will operate in around 180 countries, but that doesn't mean 180 sign-offs. Only around 130 countries have competition rules at all. And even where a regulator exists, it usually only steps in when the businesses are big enough locally to matter. In the UK, for example, s.23 Enterprise Act 2002 means the CMA can generally only examine a merger where the target has over £100 million in UK turnover, or the deal creates a 25% or greater share of supply.

🛡️ A separate national-security check. Telecoms networks carry phone calls, internet traffic, business data and sometimes government communications, across mobile networks, data centres and submarine cables. That's why governments treat them as critical infrastructure – and want to know who controls them.

The joint venture changes who owns these networks, so national-security regulators will ask whether it's safe to let a foreign company share control. In the EU, the Foreign Direct Investment Screening Regulation flags communications as critical infrastructure. The UK has its National Security and Investment Act 2021, and the US screens deals through CFIUS (the Committee on Foreign Investment in the United States).

A big part of the legal work is getting every required approval before the deadline for completing the deal. This is where a large international law firm is useful. It can use lawyers in each country who know the local regulator, rules and paperwork.

What firms are involved here?

BT is being advised by Freshfields, and Verizon is being advised by Kirkland & Ellis.

How can you use this in your applications?

Here are some ways you can use the insights from this story in your law firm applications.

Insight

How to use it in your applications

A joint venture can be a better fit than a full merger.

A joint venture lets two companies combine one part of their businesses without combining everything.

In a case study, if you’re faced with a scenario where two firms want to combine, consider a joint venture.

This lets both companies share the cost, risk or expertise needed for one project, but still keep separate control of their main businesses.

For example, a carmaker and battery manufacturer could jointly build an EV battery plant. The carmaker could keep its brand, dealerships and vehicle sales business. The battery company could keep its own customers and battery technology.

A 180-country deal really benefits from a law firm with global reach.

BT and Verizon's joint venture operates in around 180 countries. It may need competition and national-security approvals in several of them. Each country has different regulators, forms, rules and deadlines.

Use a deal like this as a concrete example when explaining why you want to work at an international law firm (especially if you're applying to Freshfields or Kirkland). Don't just say you're interested in cross-border work – tie it to a specific deal, and explain how global firms are best placed to deal with some complex international deals.

Lawyers in each country manage the local approval process, while the wider deal team coordinates everything so that the transaction can complete on time.

IN OTHER NEWS 🗞

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  • 🎟️ Ticket reseller StubHub UK has been ordered to pay nearly £1.5 million for hidden fees. The Competition and Markets Authority decided that the platform left mandatory charges out of its advertised prices, only adding them at checkout – a tactic called “drip pricing”. StubHub has to refund more than 50,000 customers around £590,000 and pay a £889,200 fine. It's the latest action under new consumer powers that let the regulator punish firms without going to court.

  • ⚖️ The merger of Hogan Lovells and Cadwalader went live today. Hogan Lovells Cadwalader is now a firm with over 3,000 lawyers and combined revenues above $3.6 billion (£2.7 billion) – making it the fifth largest by revenue. It's the second mega-merger this week, after Ashurst combined with Perkins Coie.

  • 💼 Companies are rushing to fire high earners before the UK scraps its cap on unfair dismissal payouts. Right now, compensation for unfair dismissal is capped at £123,543, but the new Employment Rights Act will remove that limit from January 2027. That will expose employers to much bigger potential claims from senior staff. Around 840,000 people earn above the cap, so finance and tech firms are reportedly cutting underperformers and making probation stricter while the law is still on their side.

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