Deutsche Telekom and MetroPCS boards approve deal involving T-Mobile [UPDATED]Alex Wagner - Senior News Editor
Yesterday both Deutsche Telekom and MetroPCS confirmed that they were in talks to merge MetroPCS and T-Mobile, and while both companies made sure to say that there was no certainty that an actual deal would result from the discussions, it looks like the two companies didn't run into any issues. The Wall Street Journal is reporting that the board from both Deutsche Telekom and MetroPCS have approved a deal between the two firms.
When it comes to the specifics of the deal, a source speaking to the WSJ claims that the combined T-Mobile and MetroPCS will be known as "T-Mobile" (so much for T-Metro and metroMobile) and will be run by new T-Mobile CEO John Legere. It's said that deal is being put together as a sort of reverse merger, meaning that MetroPCS will essentially be taking over T-Mobile. Deutsche Telekom and its shareholders will own around 75 percent of the combined T-Mobile-MetroPCS and will keep around $15 billion in debt, while MetroPCS shareholders will receive $1.5 billion in cash.
Rumblings of a merger between T-Mobile and MetroPCS have existed for a while now, but it appears that the two companies have finally pulled the trigger on an agreement. We're still waiting on confirmation of the deal from Deutsche Telekom and MetroPCS themselves, which will hopefully offer up plenty of details on the move. It's also worth noting that, although both boards may have green lit the agreement, a merger still needs to be approved by the regulatory bodies before it's complete. More details as we get 'em.
UPDATE: That didn't take long at all. Shortly after reports came out claiming that Deutsche Telekom and MetroPCS had reached a deal involving T-Mobile, an official announcement has been made confirming the news. According to the release that was just issued, the combination of T-Mobile and MetroPCS will "will deliver an enhanced customer experience through a wider selection of affordable products and services, deeper network coverage and a clear-cut technology path to one common LTE network."
The entity formed by the combination of T-Mobile and MetroPCS will be known as T-Mobile. Current T-Mobile CEO John Legere will be the new company's President and CEO, while MetroPCS CFO J. Braxton Carter will serve as CFO. It's also worth noting that although the two carriers will be combining, the release says that T-Mobile and MetroPCS will be run as two different customer units, with T-Mo COO Jim Ailing and MetroPCS COO Thomas Keys heading the units up.
As we noted previously, this agreement is still subject to approval from the usual regulatory bodies as well as MetroPCS shareholders. The deal is expected to close in the first half of 2013. You can find a video of T-Mobile CEO John Legere talking about the merger below.