Deutsche Telekom Chief Executive Officer, Tim Hoettges announced on Tuesday that he wants his money back from the £12.5 billion stake purchase of BT Group PLC (BT.L). This comes as a shock to many investors, as the two companies have had a partnership for over 15 years. This move puts into question the future of the two companies’ relationship and how it will affect their business plans in the coming weeks and months. Will this be the end of their deal or will they find a way to reconcile? In this blog post, we take an in-depth look into what could happen next between Deutsche Telekom and BT Group PLC and why this decision was made.

What is Deutsche Telekom?

Deutsche Telekom is a German telecommunications company headquartered in Bonn and with its registered office in Berlin. It is the largest telecommunications company in Europe. The company operates in around 50 countries and employs about 235,000 people. Deutsche Telekom offers mobile voice and data services, fixed-line and mobile broadband internet, IPTV, pay TV, and converged fixed-mobile products to retail customers under the T-Mobile, T-Com, and T-Online brands. The business customer segment offers products and services under the MagentaEINS brand. Deutsche Telekom also owns majority stakes in the Polish telecommunication operator Polkomtel (52%) and the US mobile operator T-Mobile US (64%).

What is BT?

BT Group PLC, formerly British Telecommunications plc, is a holding company that provides communications and services internationally. It has operations in more than 180 countries and serves more than 30 million customers. The company offers fixed-line telephone services, mobile phone services, broadband and TV products and services, as well as other communications services.

BT’s origins date back to 1846 when the Electric Telegraph Company was founded. The company later became the British Post Office Telegraph Department before being renamed as British Telecom in 1980. BT was privatised in 1984 and became a public limited company listed on the London Stock Exchange in 1991.

The group has made several acquisitions over the years, including the purchase of EE in 2016, which made it the largest mobile operator in the UK.

In October 2016, Deutsche Telekom AG announced that it planned to sell its entire stake in BT. However, this plan was put on hold after BT’s share price fell sharply following the Brexit vote.

Deutsche Telekom boss Timotheus Hoettges has now said that he wants BT to buy back his company’s stake, or he will sell it to another investor. This could spell the end of Deutsche Telekom’s involvement in BT.

The history of the BT and Deutsche Telekom Relationship

The history of the BT and Deutsche Telekom relationship dates back to 2001, when the two companies formed a strategic alliance. This alliance was intended to help both companies compete more effectively in the global telecommunications market.

In 2010, Deutsche Telekom acquired a minority stake in BT, and the two companies have been working together ever since. However, relations between the two companies have not always been smooth.

In 2014, for example, Deutsche Telekom unsuccessfully attempted to sell its stake in BT to another telecoms company, KPN. This led to tensions between the two companies, which were further exacerbated by disagreements over how to operate their joint venture in the UK, EE.

More recently, relations between BT and Deutsche Telekom have come under strain as a result of the UK government’s decision to ban Huawei from participating in the development of 5G infrastructure in the country. This decision was made amid concerns about Huawei’s links to the Chinese government and fears that its equipment could be used for espionage purposes.

Deutsche Telekom has reacted angrily to this decision, with CEO Timotheus Höttges publicly calling for BT to compensate his company for its investment in EE. It remains to be seen how this stand-off will play out, but it appears that relations between BT and Deutsche Telekom are once again under strain.

Why is Deutsche Telekom demanding money back from BT?

Deutsche Telekom is demanding that BT pay back £525 million, which is the amount that Telekom paid for its stake in BT back in 2016. This comes after BT announced that it would be writing down the value of its stake in EE by £6.7 billion.

BT acquired EE in 2016 for £12.5 billion and at the time, Deutsche Telekom owned a 12% stake in BT. The German company has now said that it wants to receive £525 million from BT, which is the amount that it paid for its stake in BT.

This demand comes as a surprise to many as it was not expected that Deutsche Telekom would ask for any money back from BT considering the fact that both companies have been working closely together since the acquisition of EE. However, it seems that Deutsche Telekom is no longer happy with the deal and wants to get out of it completely.

It is not yet clear what will happen next but this could potentially lead to the end of the deal between Deutsche Telekom and BT.

What does this mean for the future of Deutsche Telekom and BT?

This could be the beginning of the end for Deutsche Telekom and BT’s relationship. Deutsche Telekom’s CEO, Timotheus Hoettges, is demanding that BT return the £12 billion that it paid for a stake in the company back in 2016. This comes after several years of poor performance from BT, which has put a strain on their relationship.

It’s unclear what will happen next, but this could mean big changes for both companies. For Deutsche Telekom, it could mean finding a new partner or going it alone in the UK market. For BT, this could mean losing a major investor and having to find new ways to raise capital. Either way, it’s clear that this is a major turning point for both companies.

Conclusion

In conclusion, the future of Deutsche Telekom’s stake in BT remains uncertain. Despite their demands for a refund, it is unclear whether BT will comply and return the money or if they will continue to find a way to make the partnership work. Whatever happens next, it is clear that this is an important moment for both companies as they attempt to navigate through difficult times and come out stronger on the other side.