Update: T-Mobile and MetroPCS Merger Officially Approved for $1.5 billion

Update: Well it looks like after much speculation and just a day after acknowledging that talks were underway both boards have approved the deal according to the Wall Street Journal.

Financial Times Deutschland are reporting that the two carriers will be combined into a single unit in which Deutsche Telekom will hold 74 percent of shares. MetroPCS will have a 26 percent stake in the company and receive a $1.5 billion check for its troubles.

The new larger carrier will maintain the T-Mobile branding with new CEO John Legere at the helm, though, it appears the deal is structured as a reverse merger. Meaning that MetroPCS is in essence taking over T-Mobile and not the other way around.

Previous Update: I see this as definitely being a possibility for T-Mobile down the road. According to this Bloomberg article, Deutsche Telekom AG (DTE) Chief Executive Officer Rene Obermann said a merger of the T-Mobile USA division is an option, while ruling out revisiting a complete sale.

    “We do not exclude any option for the T-Mobile unit in the U.S., also not a merger,” Obermann told shareholers today at an annual meeting in Cologne, Germany. “A complete sale is unlikely. You understand that I can’t say more in public on T- Mobile USA.”

It should be interesting to see where T-Mobile goes from here.

Original Post:
According to Bloomberg, T-Mobile’s parent company, Deutsche Telekom AG, has reportedly been discussing a potential merger with MetroPCS.

Deutsche Telekom is considering a stock-swap transaction that would give the German company control over the combined entity. As of January 2012 MetroPCS has 9.5 million subscribers and has the fifth largest wireless network in the US.


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