Deutsche Telekom and MetroPCS agree to terms for T-Mobile USA merger

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According to the Wall Street Journal, the boards of Deutsche Telekom and MetroPCS have both approved a deal that would merge MetroPCS with T-Mobile USA. The company would continue to operate under the moniker T-Mobile, with recently appointed CEO John Legere heading the company. This is despite the deal being brokered as a reverse merger, meaning that MetroPCS is essentially taking over T-Mobile USA.

Deutsche Telekom will hold 74% of the shares in the new company, leaving MetroPCS with a 26% share and a hefty $1.5 billion check for MetroPCS shareholders (approximately $4 per share). The reverse merger gives T-Mobile publicly traded stock, opening the door for Deutsche Telekom to sell off shares over time should it seek to exit the US market as many have expected.

The move solidifies T-Mobile’s number 4 ranking in the mobile industry. The combined company would have approximately 42.5 million subscribers. Because the deal is with a much smaller regional carrier than a large carrier like AT&T, governing bodies are likely to give approval to the merger in coming weeks, with the deal ultimately expected to close by the end of Q2 2013.

Update: Deutsche Telekom and MetroPCS are holding a conference call to discuss the merger. You can check out All Things D’s live blog here.

[via Wall Street Journal, Financial Times]

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