T-Mobile no longer wants Deutsche Telekom to spend $300 billion on a merger between the two companies. Some of T-Mobile’s non-controlling shareholders have told the company that they would oppose a merger with Deutsche Telekom, which is a slower-growing business compared to its American counterpart.
Merger talks between T-Mobile and Deutsche Telekom kicked off earlier this year, with the two companies planning to put a deal to a vote in order to secure the approval of T-Mobile’s non-controlling stakeholders. But now, T-Mobile executives are not confident that the deal would be approved by those shareholders.
T-Mobile execs have also been told by government officials that regulators would likely seek a guarantee that T-Mobile US revenue would be reinvested in or otherwise remain in the country. T-Mobile generated adjusted free cash flow of roughly $18 billion last year alone, and paid more than $2 billion in dividends to Deutsche Telekom.
Deutsche Telekom currently holds a 53% stake in T-Mobile US
Deutsche Telekom first bought a controlling stake in T-Mobile US back in 2001, when it was still known as VoiceStream Wireless. In the early 2010s, DT wanted to sell T-Mobile US, and actually had a deal with AT&T back in 2011 for $39 billion. But that deal was blocked, and AT&T had to pay out a hefty breakup fee, which helped put T-Mobile on the map.
Now, Deutsche Telekom has totally done a 180 and wants to own all of T-Mobile US. Which is a bit of a crazy thing to think about. T-Mobile is now one of the most valuable providers on the planet, with a market cap of $185 billion. It actually generates the majority of DT’s profit and makes up about two-thirds of DT’s market value. So it’s no wonder why DT wants to fully own T-Mobile US.
The post The T-Mobile and Deutsche Telekom Merger Looks Dead, and Here’s Why appeared first on Android Headlines.
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