Sell your telecoms shares – this merger madness is bound to end in misery

A lot of money will be spent in the telecoms tie-up frenzy – but much of it will be wasted, says Matthew Lynn.

Dealmakers in the City must have felt Christmas had come early this week. On Monday British Telecom (BT) revealed it had opened negotiations to buy mobile operator EE for £12.5bn.

Bankers are probably already licking their lips at the prospect of a round of telecoms mega-mergers. Vodafone is reportedly eyeing Virgin Media or Sky, or O2 might buy TalkTalk, or TalkTalk might buy Three. There are more possible permutations than there are plot twists in Downton Abbey.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.