Deutsche Telekom is exploring the possibility of a full combination with T-Mobile, according to people familiar with the discussions, who said the German telecom is weighing a structure that would establish a new holding company to make a stock bid for shares in both Deutsche Telekom and T-Mobile.
Under the arrangement described in the report, the proposed holding company would pursue an exchange offer aimed at combining ownership of the two businesses. Deutsche Telekom is already the majority owner of T-Mobile, holding nearly 53% of the U.S. carrier according to LSEG data.
Market reaction to the news was positive for T-Mobile shares, which climbed by more than 1% following the account of the discussions.
If the companies were to complete a full combination under the contemplated plan, the resulting group would, by market capitalization figures cited, become the world’s largest wireless operator, overtaking China Mobile Ltd, which was valued at $234.67 billion in the referenced data.
The conversations are described as preliminary, and the sources emphasized that the shape of any potential transaction could still change. The report also noted that moving forward with a deal of this scale would require political support, a constraint that could influence timing and structure.
Requests for comment sent to both companies and to the White House did not receive immediate responses.
Summary
Deutsche Telekom is in early-stage talks about a possible full combination with T-Mobile through a new holding company that would make a stock offer for both firms. The German parent owns nearly 53% of T-Mobile. T-Mobile shares rose more than 1% on the report. The combined entity could become the largest wireless operator by market capitalization, surpassing China Mobile, per the values cited. Talks remain preliminary and would require political backing; details could change.
Key points
- Deutsche Telekom is considering creating a holding company to pursue a stock bid for both Deutsche Telekom and T-Mobile.
- Deutsche Telekom is the majority shareholder in T-Mobile, with a stake of nearly 53% according to LSEG data.
- T-Mobile shares rose more than 1% after the report; the combined company could exceed China Mobile in market capitalization, based on the figures cited.
Risks and uncertainties
- Talks are at a preliminary stage, meaning the proposed structure and terms could still change.
- Any transaction of this nature would require political support to proceed, introducing regulatory and political risk.
- There has been no immediate public comment from either company or from the White House, leaving key details unconfirmed.