Confirmed: T-Mobile USA, MetroPCS to Combine in Cash and Stock Deal
T-Mobile parent Deutsche Telekom said Wednesday that it has reached a deal to combine its U.S. wireless operations with MetroPCS.
Under the terms of the deal, MetroPCS shareholders will get $1.5 billion in cash and a 26 percent stake in the combined company, while Deutsche Telekom will own the remaining 74 percent.
The deal requires regulatory approval as well as a nod from MetroPCS shareholders, and is expected to close in the first half of 2013.
“We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment,” Deutsche Telekom CEO René Obermann said in a statement.
Although the deal would help strengthen T-Mobile’s business, the combined company will still lag far behind market leaders AT&T and Verizon Wireless in terms of spectrum holdings and number of subscribers.
Additionally, the two companies have considerably different business strategies and underlying technologies, issues that could complicate integration.
T-Mobile discussed the deal further on a conference call. Here’s a recap of that call..