BT Group Signs $3 Billion Reuters Contract

U.K.-based communications giant BT Group PLC on Thursday said it had signed an eight-and-a-half-year $3 billion contract to supply network services to information-company Reuters Group PLC.

In addition, BT, which owns British Telecommunications PLC and provides voice and data services mostly in the United Kingdom and Europe, said it has agreed to acquire Radianz, a financial services extranet provider owned by Reuters, for $175 million in cash.

Under the network services pact, BT will provide and manage data networks for Reuters products and services worldwide.

The Radianz deal, on the other hand, advances BT's strategy of offering more information-technology services. Radianz provides extranet infrastructure to Reuters and other companies in the financial-services industry.

"The acquisition of Radianz is of strategic importance as the global financial services market offers a huge opportunity to BT, and this will form the cornerstone of our approach to this sector," Ben Verwaayen, chief executive of BT, said in a statement.

Completion of the network services agreement depends on the acquisition of Radianz, which is subject to regulatory approval. Reuters intends to use proceeds from the sale to invest in its business and pay down debt.

Radianz reported net assets of $185 million as of Dec. 31. The company lost $2 million last year before taxes.