Telecom consolidation: BT-Verizon JV

What happened: BT and Verizon announced a 50/50 joint venture (JV) to combine their international business operations, with Verizon paying a $625m equalisation fee to BT. This deal, announced on June 29, marks the end of BT's 18-month search for a buyer. On the same day, Verizon was removed from the Dow Jones Industrial Average, and both companies' stocks experienced heavy selling.

Market impact: The telecom sector was rocked by this announcement and subsequent market reactions. BT revised down its annual guidance, and Verizon's stock fell by 5.30% on June 29 and a further 3.99% on June 30, driven by concerns over the costs and profitability of the JV, as well as the Dow removal. The telecom sector broadly saw selling pressure, with investors watching the impact of these strategic moves on companies' bottom lines.

What to watch next: BT's Q1 2021 earnings, scheduled for August 6, will provide the first insight into the financial impact of the JV. Additionally, regulatory approvals for the JV are pending, with a decision expected by the end of 2021. Lastly, Verizon's Q2 2021 earnings, due on July 22, will offer updates on its financial performance post the Dow removal and the JV announcement.