Former Telstra CEO looking to lead buyout of T-Mobile USA?

13 Aug 2012

Sol Trujillo, the former CEO of Australian fixed line incumbent Telstra, is reportedly seeking to generate interest in a buyout of T-Mobile USA, a subsidiary of German telecoms giant Deutsche Telekom (DT). According to Bloomberg, Mr Trujillo had approached private equity firms including Blackstone Group and KKR & Co, but has yet to find a receptive partner for the proposed buyout. It is understood that those private equity firms that have held preliminary discussions with Trujillo have raised concerns over the proposed deal, with the cost of financing reported to have been one of the sticking points; the unit is thought to be worth around USD30 billion, with its wireless spectrum thought to be the most valuable of its assets.

DT for its part is thought to remain open to a whole or partial sale of its US mobile unit. As noted in TeleGeography’s GlobalComms Database, in March last year the German company revealed that it had entered into a definitive agreement with AT&T to sell T-Mobile USA in a cash-and-stock transaction valued at approximately USD39 billion. However, the proposed deal provoked the ire of both companies’ wireless rivals, with third largest cellco by subscribers Sprint Nextel and regional operator C Spire Wireless (then known as Cellular South) taking steps to sue AT&T in an attempt to halt the deal. Subsequently, in August 2011 more significant opposition to the takeover emerged, with the Department of Justice (DoJ) filing a civil antitrust lawsuit against AT&T. Whilst AT&T attempted to counter the DoJ’s claims with suggestions that T-Mobile was too insubstantial to be a truly effective competitor, in December 2011 AT&T announced that it was ending its pursuit of T-Mobile USA.

United States, Deutsche Telekom (DT), T-Mobile US