Deutsche Telekom is aiming to become a market leader in the U.S., chief executive Tim Hoettges stated Wednesday, now that an agreement for its T-Mobile US unit to take over Sprint is within reach.
Striking a bullish pitch after a New York judge threw out a petition brought by a dozen U.S. states to dam the merger deal, Hoettges stated the ‘new’ T-Mobile would go on the attack and look to fill a valuation gap with AT&T and Verizon.
Ebullient, Hoettges displayed a coffee cup bearing an image of U.S. World War Two character Rosie the Riveter and the slogan ‘We Can Do It’ in front of photographers. His temper was floated by a 3.7% hike in Deutsche Telekom shares, bringing year-to-date yields to 13%.
Hoettges, 57, has contested for around seven years to do a U.S. merger deal that, on completion, would develop a transatlantic business with $120 billion in revenues and 270 million clients. A breakthrough came in April 2018 when T-Mobile and Sprint, backed by Japan’s Softbank, agreed to a $26 billion all-stock agreement.
The process of winning anti-trust approved dragged: Concessions provided in a back-and-forth with U.S. regulators pushed the deal close to the end line in 2019; however, the suit lodged by attorneys general from mainly Democrat-led states threatened to derail it within sight of the end line.
With last week’s New York court ruling in favor of the merger deal, Hoettges now expects it to conclude by April 1, subject to resolving outstanding regulatory issues.
Importantly, synergies of $43 billion targeted in the original merger remained intact, Hoettges stated. Once accomplished, the German group would control 42% of the ‘new’ T-Mobile; however, it has a voting stake of 67% and control of the panel.