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Sprint, T-Mobile rework merger terms

Deutsche Telekom will own 43% of new combined company, while SoftBank will hold a 24% stake

T-Mobile US Inc - Sprint, T-Mobile rework merger terms
T-Mobile’s parent, Deutsche Telekom, will get a better exchange ratio in the all-stock deal while Softbank takes a hit

T-Mobile US Inc (NASDAQ:TMUS) and Sprint Corp (NYSE:S) revealed Thursday that they have agreed on new terms for their merger, as the wireless carriers race to close the deal after overcoming a federal court challenge. 

The new merger terms will reduce the stake of major Sprint shareholder SoftBank Group Corp (OTCMKTS:SFTBY), while leaving the offer to other shareholders unchanged. 

The parties will improve the exchange ratio in the all-stock deal for T-Mobile’s parent, Deutsche Telekom AG, the companies said in a statement.

READ: Bigtincan wins record $7.2 million T-Mobile contract extension, shares surge

Under the reworked deal, SoftBank will hold about 24% of the combined entity, down from 27% under the earlier terms. T-Mobile’s parent Deutsche Telekom will hold about 43% of the combined entity, up from the 42% that the German group would have held.

Originally, 9.75 Sprint shares were to be exchanged for each T-Mobile share. Under the revised deal, SoftBank, which owns more than 80% of Sprint’s stock, will exchange the equivalent of 11 of its shares for each T-Mobile share. Sprint’s other shareholders will continue to get the original exchange ratio.

SoftBank has agreed to surrender 48.8 million T-Mobile shares to the new company, to be called T-Mobile. Those shares could be reissued to SoftBank if T-Mobile’s stock price reaches certain milestones beginning two years after the deal closes.

US District Judge Victor Marrero last week allowed the deal to proceed by rejecting arguments from a group of state attorneys general seeking to block the merger as anti-competitive.

T-Mobile said after the court ruling that it was working to close the transaction as soon as April 1.

Contact the author Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive

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NASDAQ:TMUS
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