Deutsche Telekom Eyeing Majority Stake In T-Mobile By Acquiring Softbank's Share: Bloomberg

Author: Anusuya Lahiri | May 19, 2021 03:34pm

Deutsche Telekom AG (OTC: DTEGF) is targeting majority ownership in T-Mobile US Inc (NASDAQ: TMUS) by acquiring SoftBank Group Corp’s (OTC: SFTBF) (OTC: SFTBY) 8% stake in the wireless carrier at a deal valued at $12 billion, Bloomberg reports.
SoftBank became a co-owner of T-Mobile with Deutsche Telekom after the carrier acquired Sprint for $26.5 billion in 2020, as per Bloomberg.
Deutsche Telekom presently holds a 43% stake in T-Mobile.
T-Mobile stock has appreciated 215% in the last five years and is valued at close to $170 billion.
Peers Verizon Communications Inc (NYSE: VZ) shares have gained 15%, and AT&T Inc (NYSE: T) lost 24% in the last five years.
T-Mobile CEO Mike Sievert announced plans to return $60 billion to the shareholders via share buyback between 2023 and 2025 from incremental cash flow savings following the Sprint Corp acquisition.
However, the acquisition could pressurize the already high debt level of Deutsche Telekom, which remains heavily invested in next-generation 5G and fiber-optic networks.
Price action: DTEGF shares traded lower by 6.82% at $20.37, SFTBF shares traded higher by 0.54% at $80.89, and TMUS shares traded lower by 0.47% at $134.36 on the last check Wednesday.
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