14 DAY TRIAL // On March 20th, Deutsche Telekom announced that it is handing T-Mobile USA to AT&T, and that it would receive 39 billion USD for the 100 percent ownership of the US business.
The wireless carrier revealed that it would take an approximately 8 percent stake in AT&T, and that the latter would pay 25 billion USD in cash for T-Mobile USA, along with the 14 billion USD in AT&T shares.
According to the agreement between the two, AT&T can increase the portion of the purchase price paid in cash by up to $4.2 billion, while reducing the stock component accordingly.
The total value of the transaction will be almost 7 times 2010 adjusted EBITDA. The merger of the two requires US regulatory approval, and is expected to be completed in the first half of 2012.
The deal between the two wireless carriers has already received the necessary approvals from their board of directors.
“We have achieved the best solution for our company, our customers and shareholders. This will strengthen our position in Europe, whilst we are still participating in the rapidly growing business of mobile data,” René Obermann, CEO Deutsche Telekom, commented.
“We will be able to focus more on the opportunities of a modern infrastructure in Germany and Europe, as well as in Internet products that accompanies to our strategy 'fix, transform and innovate'.”
“Following our initiatives of finding a solution for our activities both in the United Kingdom and Poland, we have with this transaction nearly accomplished the “fix” part of our strategy. We will now focus our resources more on the “transform” and “innovate” blocks of our strategy in order to accelerate the transformation of Deutsche Telekom.”
Following the merger, T-Mobile USA will continue to operate as an independent company, and all handsets on the carrier's network will continue to operate as before. However, the deal will not result in the availability of the iPhone on T-Mobile.