Deutsche Telekom is making good on its promise to become majority owner of T-Mobile US, paying $2.4 billion to SoftBank Group to increase its stake to 48.4% in the U.S. company.
Deutsche Telekom, based in Bonn, Germany, bought 21.2 million T-Mobile shares at an average price of $113 per share. The move raised its stake in T-Mobile by 5.3%.
If this all sounds familiar, it’s because it was part of a plan announced last year. In September, Japan’s SoftBank agreed to exchange about 45 million T-Mobile shares for a 4.5% stake in Deutsche Telekom.
As Bloomberg explained, the deal allowed SoftBank to borrow against its T-Mobile stake as long as Deutsche Telekom gets to vote the shares pledged as collateral. SoftBank still holds about 39.7 million shares in T-Mobile, now worth about $5.2 billion.
For the transaction, Deutsche Telekom used some of the $4.3 billion it received from the sale of T-Mobile Netherlands. Deutsche Telekom and Tele2 AB sold the Dutch business to a consortium of private investors late last month.
SoftBank, as the former parent of Sprint, got its stake in T-Mobile when the two U.S. carriers completed their merger in 2020. As part of the Sprint sale to T-Mobile, DT secured voting rights over SoftBank’s 8.5% share.
DT made clear it wants to have majority ownership of the U.S. operator, which last year cemented its position as the No. 2 wireless provider in the U.S. by subscribers.
T-Mobile has become a darling of sorts for U.S. investment analysts, boasting 5G leadership and synergies brought from the Sprint merger. T-Mobile is also shifting more attention to areas where it previously didn’t have much share at all, namely enterprise and rural markets.
T-Mobile shares were up about 2% today, trading at $134.22 at mid-day.
Towers in play
Meanwhile, Reuters reported that Deutsche Telekom is reviewing proposals from a slew of financial and corporate investors that approached the company with takeover options for its tower business.
Among the reported bidders: Vodafone's Vantage Towers unit and a consortium that includes the investment firm KKR and Global Infrastructure Partners (GIP). The business is valued at up to $19.56 billion and also has drawn interest from American Tower in the U.S. and Spanish mobile phone infrastructure operator Cellnex, according to Reuters.