Deutsche Telekom and MetroPCS boards officially approve $1.5 billion merger
MetroPCS' and Deutsche Telekom's boards have finally voted to approve a $1.5 billion merger deal
The boards of Deutsche Telekom and MetroPCS have finally voted to approve a deal that would combine MetroPCS with T-Mobile USA. The new operator will work under the T-Mobile USA brand and be headed by new T-Mobile CEO John Legere.
“We are extremely pleased to announce this transaction with MetroPCS, which enhances Deutsche Telekom’s position in the expanding U.S. wireless market,” said René Obermann, Chief Executive Officer of Deutsche Telekom, in a statement. “The T-Mobile and MetroPCS brands are a great strategic fit – both operationally and culturally."
With the merger, Deutsche Telekom will hold 74 percent of the new operator, whereas MetroPCS will have a 26 percent stake. Deutsche Telekom may divest its venture at any time, however, which would give MetroPCS the controlling venture.
The combined company will likely be a stronger competitor and will bring its subscriber total to above 42.5 million. That number still falls far below Sprint's subscriber total, which currently rests at 56 million. MetroPCS also has a strong head start on LTE, which should help T-Mobile as it rolls out an LTE network in early 2013.
The deal will still need to pass the necessary regulatory approvals, but that shouldn't be too hard, especially considering MetroPCS is a smaller carrier. An approval is expected in early 2013.