DEUTSCHE TELEKOM is nearing a deal with MetroPCS Communications to increase the scale of its T-Mobile USA division, according to people with knowledge of the matter.
Deutsche Telekom’s supervisory board is scheduled to meet in Bonn today to approve a deal. The company may make an announcement the same day. The transaction will involve multiple steps including a stock swap that would give the German company majority ownership of the combined entity, said one of the people.
MetroPCS shares jumped as much as 26 per cent yesterday to the highest level in 14 months in New York after reports of the talks.
Deutsche Telekom has been considering a deal with MetroPCS since May, hoping to create a US operator which would be publicly listed. T-Mobile USA, with 33.2 million customers, is seeking to boost its customer base to better compete with the largest rivals Verizon, ATT and Sprint Nextel.
“The potential synergies are so high, and this would resolve the huge issue that is T-Mobile USA with a real long-term solution,” Alexandre Iatrides, an analyst at Oddo and Cie in Paris, said.– (Bloomberg)
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