T-Mobile, Sprint tweak merger terms; SoftBank to take reduced stake

21 Feb 2020

T-Mobile US and Sprint have formally amended their definitive ‘Business Combination Agreement’, altering the proposed shareholder structure of New T-Mobile. The amendment will result in an effective exchange ratio of approximately 11.00 Sprint shares for each T-Mobile share – an increase from the originally agreed 9.75 shares. This is a result of SoftBank agreeing to surrender approximately 48.8 million T-Mobile shares acquired in the merger to New T-Mobile immediately following the closing of the transaction, making SoftBank’s effective ratio 11.31 Sprint shares per T-Mobile share.

Sprint shareholders other than SoftBank will continue to receive the original fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share, or the equivalent of approximately 9.75 Sprint shares for each T-Mobile share. Immediately following the closing of the merger – and after the surrender of shares by SoftBank – Deutsche Telekom (DT) and SoftBank are expected to hold approximately 43% and 24%, respectively, of the fully diluted New T-Mobile shares, with the remaining 33% to be held by public shareholders.

While the merger is expected to close as early as 1 April 2020, the official ‘outside date’ has been extended to 1 July 2020, meaning that either party may terminate the agreement if the transaction has not concluded by that date.

United States, Deutsche Telekom (DT), SoftBank Group Corp, Sprint Corporation (now part of T-Mobile US), T-Mobile US