[h=3]By ANTON TROIANOVSKI And ARCHIBALD PREUSCHAT[/h]
Deutsche Telekom AG confirmed it is in talks to merge its T-Mobile USA subsidiary with rival MetroPCS, Anton Troianovski reports on digits. Photo: T Mobile USA.
The boards of Deutsche Telekom AG and MetroPCS Communications Inc. have approved a deal to merge MetroPCS with the German operator's U.S. subsidiary, T-Mobile USA, people familiar with the matter said Wednesday, a deal that would give the fourth-largest U.S. wireless carrier more scale as it tries to compete with the industry's leaders.
The move further consolidates the U.S. wireless industry, but in a way that is likely to be well received by regulators, who last year shot down T-Mobile's $39 billion deal to be acquired by AT&T Inc. to avoid reducing the ranks of national carriers from four to three.
It also puts pressure on No. 3 wireless carrier Sprint Nextel Corp., which had previously explored mergers with both MetroPCS and T-Mobile and now lacks a clear path for quickly adding scale.
The combined company wil be called T-Mobile and run by T-Mobile Chief Executive John Legere, a person familiar with the deal's terms said.
It will be structured as a reverse merger, the person said, meaning in effect the smaller company, MetroPCS, will swallow its larger rival. That approach will give T-Mobile a publicly traded stock, which Deutsche Telekom could sell down over time to reduce its ownership of its U.S. subsidiary. The German company has long looked to exit the slow-growing U.S. market, where it has lacked the scale of the industry's leaders.
Deutsche Telekom shareholders will own about 75% of the combined company, people familiar with the matter said. Deutsche Telekom will keep about $15 billion of the company's debt, while MetroPCS shareholders will get $1.5 billion in cash, or about $4 a share, according to the person familiar with the deal.
The merger of T-Mobile and MetroPCS , the fifth largest U.S. wireless carrier, would create a bigger No. 4 player in the industry, though the combined company with about 42.5 million customers will still lag behind Sprint Nextel Corp., AT&T and Verizon Wireless by number of subscribers.
Write to Anton Troianovski at [email protected] and Archibald Preuschat at [email protected]
Deutsche Telekom AG confirmed it is in talks to merge its T-Mobile USA subsidiary with rival MetroPCS, Anton Troianovski reports on digits. Photo: T Mobile USA.
The boards of Deutsche Telekom AG and MetroPCS Communications Inc. have approved a deal to merge MetroPCS with the German operator's U.S. subsidiary, T-Mobile USA, people familiar with the matter said Wednesday, a deal that would give the fourth-largest U.S. wireless carrier more scale as it tries to compete with the industry's leaders.
The move further consolidates the U.S. wireless industry, but in a way that is likely to be well received by regulators, who last year shot down T-Mobile's $39 billion deal to be acquired by AT&T Inc. to avoid reducing the ranks of national carriers from four to three.
It also puts pressure on No. 3 wireless carrier Sprint Nextel Corp., which had previously explored mergers with both MetroPCS and T-Mobile and now lacks a clear path for quickly adding scale.
The combined company wil be called T-Mobile and run by T-Mobile Chief Executive John Legere, a person familiar with the deal's terms said.
It will be structured as a reverse merger, the person said, meaning in effect the smaller company, MetroPCS, will swallow its larger rival. That approach will give T-Mobile a publicly traded stock, which Deutsche Telekom could sell down over time to reduce its ownership of its U.S. subsidiary. The German company has long looked to exit the slow-growing U.S. market, where it has lacked the scale of the industry's leaders.
Deutsche Telekom shareholders will own about 75% of the combined company, people familiar with the matter said. Deutsche Telekom will keep about $15 billion of the company's debt, while MetroPCS shareholders will get $1.5 billion in cash, or about $4 a share, according to the person familiar with the deal.
The merger of T-Mobile and MetroPCS , the fifth largest U.S. wireless carrier, would create a bigger No. 4 player in the industry, though the combined company with about 42.5 million customers will still lag behind Sprint Nextel Corp., AT&T and Verizon Wireless by number of subscribers.
Write to Anton Troianovski at [email protected] and Archibald Preuschat at [email protected]