…and come out with a quid-pro-quo. Deutsche Telekom (DTE), the largest telecommunications provider in Europe, has been playing hardball with startup-investor SoftBank to acquire the Japanese investment firm’s stake in the US-based cellphone network T-Mobile (TMUS).
On Tuesday, Deutsche Telekom and Softbank agreed to a share-swap deal. Since T-Mobile is still technically publicly-traded, the acquisition will be done through the markets. The German telecom giant will buy 65 million T-Mobile shares for a price of $109/share, while (in return) Softbank will receive cash and a 4.5% stake in Deutsche Telekom. The transaction value for the deal is estimated at $7b and will bring Deutsche Telekom’s stake in T-Mobile to 48.4%.
For Deutsche, the deal strengthens the group’s hold in the US while bringing a seasoned partner like Softbank to the table. The two have already started strategizing on how SoftBank’s diverse portfolio could benefit from Deutsche’s customer base.