DT to Increase Control over T-Mobile US and Sell T-Mobile Netherlands

Deutsche Telekom struck an agreement with SoftBank to increase control over its T-Mobile US operation. The company also announced a deal to sell its Dutch unit to a consortium of private equity funds for €5.1 billion.

Starting with the deal with SoftBank, the pair jointly decreed DT will receive 45 million shares in T-Mobile US which are currently owned by the Japanese company. Furthermore, DT will exercise call options granted in 2020 to acquire another 20 million shares in the US operator, reinvesting $2.4 billion from the T-Mobile Netherlands sale. The two moves will lift DT’s ownership in T-Mobile US to 48.4 percent.

In exchange for the 45 million shares, SoftBank is set to receive 225 million new shares in Deutsche Telekom at a price of $20 per share, a 12 percent premium on current trading levels, giving the Japanese player a 4.5 percent stake in the German operator. The deal makes SoftBank the third-largest shareholder in DT after the German government and private equity company BlackRock, and helps to diversify its telecoms exposure outside Japan and into Europe. Furthermore, Deutsche Telekom’s management will support a proposal for Marcelo Claure, CEO of SoftBank Group International and also group EVP and COO, to be appointed to DT’s supervisory board. “This is a landmark transaction that is a true win-win-win for our portfolio companies, SoftBank and Deutsche Telekom,” Claure commented.

The agreed sale of Deutsche Telekom’s 75 percent stake in T-Mobile Netherlands comes two months after a sales process kicked off and ends long-running rumours the unit was on the chopping block. Tele2 Group, which owns the remaining 25 per cent, also agreed to sell its stake. A consortium of Apax Partners and Warburg Pincus will be the new owners, with the €5.1 billion equating to approximately 8.7-times the €582 million earnings T-Mobile Netherlands generated in 2020. The funds will own a 50 percent stake each and pledged to support T-Mobile Netherlands on its next phase of growth.

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