Deutsche Telekom again holds majority stake in T-Mobile US

Deutsche Telekom holds more than 50 percent of the shares in its subsidiary T-Mobile US again for the first time since the merger with Sprint in 2020. The cost of buying more than 20 million shares is more than $2 billion.

50.2 percent of shares

Deutsche Telekom has secured 20 million shares in subsidiary T-Mobile US in a deal that brings its total shareholding in the company to 50.2 percent. T-Mobile US is the second-largest mobile operator in the United States and correspondingly strong in terms of revenue. The company was founded in 2001 as part of the acquisition of the network operators Voicestream and Powertel. Deutsche Telekom’s CEO at the time, Ron Sommer, was criticized for this move. Telekom paid around DM 60 billion to take over the two companies and also had to assume Voicestream debt of around USD 11 billion. All of this resulted in enormous debt, which Telekom’s shareholders did not honor.

In 2012, T-Mobile US merged with MetroPCS and went public, followed by the merger with Sprint in 2020. As a result, Telekom was left with only 42 percent of the shares in the U.S. company, which did not allow for sole control. This circumstance has now been changed. With a shareholding of 50.2 percent, Telekom can once again make decisions about its U.S. subsidiary on its own. Meanwhile, voting rights are as high as 53.9 percent, thanks to agreements with Softbank as well as with Raul Marcelo Claure Bedoya, Bolivia’s richest person. Both also hold relevant stakes in T-Mobile shares. However, they have left their accompanying voting rights to Deutsche Telekom.

Important strategic goal

Gaining control of T-Mobile US was an important strategic goal for Telekom. Back in 2021, it had agreed with Softbank on the purchase of several million shares, which was to take place over a period ending in the summer of 2024. Now the finalization of the deal and thus the achievement of the target has been brought forward. Further acquisitions have not been ruled out. T-Mobile US’ business is going very well; share prices have also risen noticeably recently. At the same time, the company had to pay huge compensation last year to victims whose data was stolen in a cyber attack. Earlier this year, a new cyberattack occurred. No decision has yet been made on compensation here.