Deutsche Telekom (DT) entered talks with SoftBank Group about buying the Japanese company’s stake in T-Mobile US as the German incumbent considers increasing its ownership of the business, Bloomberg reported.
The German operator currently owns 43 per cent of T-Mobile US and has a right to acquire up to 51 per cent of the company by purchasing the stake currently held by SoftBank. SoftBank gave Deutsche Telekom the option to purchase its shares last year.
The Japanese operator has also given Deutsche Telekom the right to vote its shares, meaning that Deutsche Telekom has a controlling interest in T-Mobile US already. Deutsche Telekom has been T-Mobile US’s controlling shareholder since acquiring the company in 2001.
According to T-Mobile US, any acquisition of additional shares by Deutsche Telekom does not change T-Mobile US’s existing governance structure, which is already spelled out in a stockholders agreement.
It could, however, give Deutsche Telekom a larger portion of T-Mobile US’s profit. T-Mobile US has proven to be a top-earner for DT, contributing more than half of its income in Q1.
Deutsche Telekom could also pick up the extra shares at an attractive price. According to Bloomberg, SoftBank gave Deutsche Telekom the option to buy some of its shares for roughly $100 each. T-Mobile US stock is currently trading at around $135.Subscribe to our daily newsletter Back