14 DAY TRIAL // Started as a rumor a few days ago, the T-Mobile USA and MetroPCS merger has just been made official by both companies.
Deutsche Telekom and MetroPCS have just announced they have reached an agreement to combine T-Mobile USA, owned by the former, and MetroPCS.
MetroPCS shareholders will receive $1.5 billion in cash and 26% ownership in combined company, while Deutsche Telekom will get 74% stake in combined company.
The resulting company will retain the T-Mobile name in an attempt to increase customer database and revenue scale in the United States.
“We are excited about this agreement to combine with T-Mobile, which, upon closing, provides our shareholders with an immediate cash payment and allows them to participate in the significant upside potential of the combined company,” said Roger D. Linquist, chairman and chief executive officer of MetroPCS.
The new company will be run by the current President and Chief Executive Officer of T-Mobile, John Legere, and will continue to trade on the New York Stock Exchange.
More importantly, it’s important to note that all existing MetroPCS customers will be migrated to a common LTE-based network, but only after they upgrade their handsets in order to support this standard.
According to the latest reports, the combined company will have approximately 42.5 million subscribers, $24.8 billion of revenue and $2.1 billion of free cash flow in 2012.
“The combination with MetroPCS is another logical and significant step that will accelerate our Challenger Strategy and enable us to deliver amazing, affordable and trusted 4G services, while providing opportunities to expand geographic territories and serve more customers. Our enhanced spectrum position will be the foundation for a faster and more reliable network, and will allow us to deploy a deeper and more robust LTE rollout, particularly in major metropolitan areas,” said John Legere, president and chief executive officer of T-Mobile.