Shares of Deutsche Telekom fell by over 3% on Wednesday after media reports said the German telecoms group is studying a possible full combination with its U.S. arm, T-Mobile US.
Those reports indicated the plan under consideration would involve establishing a new holding company that could launch a stock offer for shareholders of both Deutsche Telekom and T-Mobile US. The group currently owns nearly 53% of T-Mobile.
If such a transaction were successfully completed, the combined entity would become the largest wireless operator in the world by market capitalization, surpassing China Mobile, which is valued at $234.67 billion. Under the reported figures, Deutsche Telekom’s market capitalization is about $166.46 billion and T-Mobile’s is roughly $218.57 billion.
People familiar with the matter described the conversations as being at an early, exploratory stage. The reports emphasized that any definitive agreement would require political support in both Germany and the United States, and that proposed terms could still be altered as discussions progress.
Observers also noted the additional complexity presented by Deutsche Telekom’s shareholder structure. The German federal government and the state-controlled lender KfW each hold approximately 14% of the company, giving both significant influence over any potential restructuring or change of corporate control.
Deutsche Telekom has been the majority owner of T-Mobile since it acquired VoiceStream for $50.7 billion in 2000. Its stake in the U.S. carrier was reduced over time following T-Mobile’s subsequent deals, including mergers with MetroPCS in 2013 and Sprint in 2020.
Executives and other market participants have described the situation as fluid; the reported proposals remain under discussion and no binding terms or approvals have been announced.
Market context: The reports and ensuing share price movement underline the potential scale of cross-border consolidation in the telecoms sector, though the outcome is uncertain given the number of stakeholders and the political dimensions highlighted in the discussions.