- GeneralM&A
- September 7, 2021
- 5 minutes read
Deal: SoftBank Swaps T-Mobile Shares For Deutsche Telekom
SoftBank Group, the ever deal-making Japanese tech conglomerate, is back again with another multi-billion-dollar deal. This time, it’s the company…
SoftBank Group, the ever deal-making Japanese tech conglomerate, is back again with another multi-billion-dollar deal. This time, it’s the company swapping shares in an American telecoms giant with that of a German counterpart.
- SoftBank is swapping some shares in T-Mobile US (NASDAQ: TMUS) for that of Deutsche Telekom (DT) (ETR: DTE) in Germany. The swap will give SoftBank a 4.5% stake in Deutsche Telekom that’s worth about $5bn at the agreed-upon price. Afterward, it’ll retain a 3.3% stake in T-Mobile US.
- As per official deal terms, Deutsche Telekom (DT) will get 45 million existing T-Mobile US shares from SoftBank in exchange for issuing 225 million new shares of itself to the Japanese conglomerate for €20 each, a 12% premium to their current price on the public markets.
- Additionally, Deutsche Telekom has laid out plans to invest some $2.4bn of expected proceeds from the just-announced sale of its T-Mobile Netherlands franchise to buy 20 million more T-Mobile US shares from SoftBank. The Netherlands franchise is selling to a private equity group for 5.1 billion euros ($6bn).
- T-Mobile US is the second-largest wireless carrier in the US. It was previously the third but became 2nd after merging with rival Sprint in the most talked-about telecom deal of last year. In Germany, state-controlled Deutsche Telekom is the country’s major wireless carrier.
- That SoftBank will swap T-Mobile shares for Deutsche Telekom is no strange deal. This is because both companies are tied to each other, with T-Mobile an offshoot of Deutsche Telekom. In fact, the latter is the biggest shareholder in the former with a stake of about 43%. The German telecoms giant has then made known its intent to buy the majority of T-Mobile US by 2024, making this deal look exactly like a step towards that.
- SoftBank and billion-dollar deals are two things that are inseparable. Every now and then, the Japanese tech conglomerate is either buying up or selling assets for billions, mostly in the technology industry. This seems like just another day for the company, but opening up the biggest tech deal in this new week.
