BT says it has agreed to buy British mobile operator EE for £12.5bn, and would raise £1bn through a placing of new shares to fund the deal.

The group, the country's biggest fixed-line telecoms provider, had spent the last few weeks in exclusive talks with the owners of EE, Orange and Deutsche Telekom, about a deal.

BT said it would fund the deal through new debt and the placing. 

Following the transaction, Deutsche will hold a 12% stake in BT and Orange will hold a 4% stake.