UK telco BT Group has announced plans to acquire TalkTalk Telecommunications Limited and PlatformX Communications Limited, both of which are currently in administration.

The deal offers a rescue package to struggling UK broadband provider TalkTalk. BT said it will ensure continuity of service for the network's 2.5 million customers, and secure 900 jobs.

BT said it is making the acquisition on a debt-free basis, and estimates the deal will come at a cost of some £400 million ($529m).

The company effectively said it was compelled to step in to save TalkTalk's consumer and wholesale (PXC) operations, noting that it "recognized the risk to the country, and especially vulnerable customers and key public services, should the company collapse."

Founded in 2003 as a subsidiary of mobile phone retailer Carphone Warehouse, TalkTalk founder Charles Dunstone spun off the firm to become an independent company in 2010.

TalkTalk, which is currently the fifth-largest broadband provider in the UK, behind BT Group, Sky, Virgin Media O2, and Vodafone, has struggled in recent years. BT's rival Virgin Media previously abandoned a deal to acquire the company.

The group has shed customers in the last few years, while also reducing its overall headcount by 20 percent, including the loss of 130 jobs at its Salford consumer division in December. In August, TalkTalk sold 120,000 of its customers to CVC-backed Rise Fibre.

During the last 12 months, TalkTalk reported revenues of around £1.2bn ($1.6bn) and was loss-making.

BT's agreement to take the company out of administration will see the telco acquire its 1.5 million retail customers and its one million wholesale customers across the UK. This includes vulnerable households, and connections that support critical national infrastructure providers across health, emergency services, defense, education, transport, banking and government.

BT expects a regulatory review of the transaction to take place over the coming weeks.

"This is a genuinely unprecedented situation, where millions of citizens and businesses were at risk if TalkTalk had collapsed. BT is the digital backbone of the country, with a presence in every postcode. We have been connecting the nation for generations, stepping up in the moments that matter, and BT acquiring TalkTalk is now the only viable option to keep millions of customers connected and supported," said Allison Kirkby, chief executive of BT Group.

“Our immediate priority is to stabilize the business and provide a safety net for the households and businesses who rely on TalkTalk. Once the regulatory process has been concluded, TalkTalk’s customers will benefit from access to the UK’s best network, and the full range of market-leading products and services that BT offers. And, over a period of time, the transaction will create value for all our stakeholders – customers, colleagues, the country, and our owners.”

In its announcement today, BT Group's Clive Selley will lead the stabilization and integration planning of the acquisition, while Martijn Blanken will take over Selley's role as CEO of BT International, in addition to being CEO-Designate of BT’s proposed international joint venture with Verizon.