BT Group and Verizon have agreed to combine their international enterprise operations in a 50:50 joint venture that would create one of the world’s largest multinational connectivity providers.

The proposed company is expected to serve more than 3,000 customers across more than 180 countries, with about $4 billion in combined annual revenue.

The deal brings together BT International and Verizon’s international enterprise wireline business at a time when large organisations are under growing pressure to run secure, resilient and compliant digital networks across multiple jurisdictions.

The joint venture is being pitched as a cloud-first, AI-ready platform for multinational organisations that need secure connectivity across borders, cloud environments and regulated markets.

According to BT and Verizon the combined operation would give customers access to stronger global network and service capability, while also supporting local compliance and sovereignty requirements.

Both companies will hold equal voting rights in the new entity. Verizon has also agreed to pay BT an equalisation payment of $625 million as part of the transaction.

The move gives both telecommunications groups a clearer way to focus on their domestic operations, while still retaining exposure to international enterprise services through the joint venture.

BT will continue to focus on its UK strategy, while Verizon will maintain its direct relationships with customers in the United States.

The new joint venture will be incorporated in the Bailiwick of Jersey and headquartered and tax resident in the United Kingdom.

Once completed, it will establish commercial relationships with both parent companies, allowing it to provide end-to-end international services, including for BT customers in the UK and Verizon customers in the US.

BT and Verizon say the new venture would be better placed to invest in next-generation connectivity platforms for multinational customers whose operations now depend heavily on cloud infrastructure, AI systems, cybersecurity controls and cross-border data movement.

Allison, Chief Executive of BT Group, said, “the world’s leading brands and international organisations trust BT International to connect them across the world,”

“Bringing together this expertise and heritage with Verizon’s deep relationships with multinationals will create a stronger, scaled connectivity partner – one that has the reach, innovation and investment to succeed,” said Kirkby

“Customers will benefit from new, secure and resilient connectivity platforms, which are designed for the age of AI and sovereign where it matters

“It will create new opportunities for our people and long-term value for our owners. today’s announcement marks a major milestone for BT International, and an important step forward for BT as a whole, as we deliver on our UK-focused strategy.” she said.

Dan Schulman, CEO of Verizon, said, “our international customers require secure, flexible connectivity that works seamlessly across borders and cloud environments,”

“When we thought about how to best support them, this joint venture was the clear answer: a cutting-edge, AI-ready and secure platform run by a single global organisation dedicated to their needs,” said Schulman

“At the same time, our relationship with those customers will stay equally strong as we continue to directly provide them with the connectivity they need in the U.S.” he said.

Meanwhile, BT and Verizon have also confirmed the appointment of Martijn Blanken as Chief Executive Officer-designate of the new joint venture.

Blanken has almost three decades of senior leadership experience across telecommunications, technology and digital infrastructure, including roles at Telstra, Openwave Systems, EXA Infrastructure and KPN.

From September 1, he will join BT and work with both parent companies as they prepare for the proposed launch, while observing relevant regulatory requirements.

Clive Selley will continue to lead BT International as CEO, maintaining continuity during BT International’s ongoing transformation ahead of the planned joint venture.

Verizon’s leadership structure will remain unchanged.

The transaction remains subject to regulatory clearances and employee consultation requirements in countries where those processes are required.

Until the deal closes, BT and Verizon’s international businesses will continue to operate independently.

Goldman Sachs acted as lead financial adviser to BT, with Deloitte providing transaction services advice and Freshfields LLP acting as legal counsel. Morgan Stanley & Co. LLC advised Verizon, while Kirkland & Ellis LLP acted as its legal counsel.