German telecommunications giant Deutsche Telekom’s headquarters in Bonn, Germany.
Andreas Rentz | Getty Images
Deutsche Telekom struck a share-swap deal with Softbank to increase its stake in U.S. unit T-Mobile and sold its Dutch unit in a major restructuring of interests that strengthens the German group’s transatlantic focus.
As a result of the two deals announced on Tuesday, Deutsche Telekom will raise its stake in T-Mobile US by 5.3% to 48.4%, bringing CEO Tim Hoettges closer towards his goal of securing direct majority control over the U.S. telecoms operator.
Softbank will in return receive a 4.5% stake in Deutsche Telekom, establishing a direct shareholding relationship after Softbank sold its U.S. Sprint unit to T-Mobile in a deal that closed in early 2020.
In a separate deal, Deutsche Telekom sold its Dutch unit T-Mobile Netherlands to a consortium of private equity houses Apax and Warburg Pincus for 5.1 billion euros ($6.05 billion).
Deutsche Telekom acquired control of the Dutch business from Sweden’s Tele2 in 2018 but never considered the unit, which ranked a distant third behind market leaders KPN and Vodafone Ziggo, as a core asset.
Deutsche Telekom will invest some of its 3.8 billion euros in proceeds from the Dutch deal to raise its stake in T-Mobile US. Sweden’s Tele2, which had retained a 25% stake in T-Mobile Netherlands, also sold out.