Deutsche Telekom examines a complete merger with its American subsidiary T-Mobile US, in a move that could be the largest M&A deal in history. The German group, which already owns 53% of T-Mobile, plans to set up a new equity swap holding company. The merger would create the world's largest wireless service provider, surpassing China Mobile valued at $235 billion. Discussions are at an early stage and require political support, while the two companies refused to comment.
Analyticalally:
The Deutsche Telekom examines the possibility of full integration with its American subsidiary T-Mobile US, a move that could create a multinational telecommunications group and develop into the largest merger and acquisition agreement in history, according to sources with knowledge of the issue invoked by Bloomberg.
Deutsche Telekom is already its largest shareholder T-Mobile, holding about 53% of the shares. According to the same sources, the German group is considering the creation of a new holding company, which will submit a proposal to exchange shares for both Deutsche Telekom and T-Mobile.
The possible agreement would lead to the creation of a single and simplified corporate scheme that would control the activities of the two companies and be jointly owned by their existing shareholders. The new entity could then seek admission to a United States stock exchange and a large European stock exchange, although the details remain in configuration.
Discussions are at an initial stage and any transaction will require political support to proceed, sources point out, stressing that conditions may be changed. The two companies have been considering for years the possibility of closer cooperation, without any certainty that they will eventually proceed to an agreement this time.
«According to their usual practice, DT and TMUS do not comment on speculation about their corporate activities, nor is there specific evidence to comment on your question», said a representative of Deutsche Telekom in a written statement. T-Mobile representative refused to comment.
Its shares Deutsche Telekom They negotiate to significantly lower profit multiplier than T-Mobile, which contributes most of the group's profits. A merger could limit this discount and enhance the size of the group, allowing it to pursue further acquisitions.
At the same time, it would create the world's largest wireless service provider based on capitalization, surpassing China Mobile, which is valued at approximately $235 billion.
T-Mobile's share has retreated about 22% over the past year, shaping its capitalization near $217 billion. Accordingly, Deutsche Telekom has recorded a drop of about 10% in Frankfurt, with an estimated EUR 141 billion (US$ 166 billion).
Read more details on Newmoney. gr
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