MetroPCS shareholders approve T-Mobile merger
Investor approval is now a done deal, allowing T-Mobile USA parent Deutsche Telekom and MetroPCS Communications to move forward on the merger.
T-Mobile USA and MetroPCS can become one now that the merger deal has received the thumbs-up from MetroPCs shareholders.
MetroPCS shareholder approval, announced Wednesday, was the final step needed after the deal received approval from the boards of MetroPCS and T-Mobile USA parent Deutsche Telekom, as well as.
The deal is now expected to close by May 1 at which time the new combined company will officially launch, according to Deutsche Telekom.
"This is a major step for Deutsche Telekom," Deutsche Telekom CEO Rene Obermann said in a statement. "We have accomplished a lot in the USA recently, for example our network modernization and the new T-Mobile USA management team, which has seen considerable success. And we have finalized the contracts with Apple and MetroPCS. The merger with MetroPCS is extremely important, since it enables us to be more aggressive in the USA."
The combined company will keep the T-Mobile name and is expected to offer more competition in the mobile market than the two carriers did individually.
T-Mobile said last year that it expects the merger to offer several benefits both to the new company and to its subscribers.
The deal will combine the cellular networks of T-Mobile and MetroPCS to offer more coverage overall and greater deployment of 4G LTE. MetroPCS subscribers will be able to tap into LTE by upgrading their phones. The combined company is also expected to offer a wider variety of mobile plans including contract, no-contract monthly, SIM-only, and pay-as-you-go options.
"We are thrilled that MetroPCS stockholders voted to approve this transaction which delivers strategic and financial benefits," T-Mobile USA CEO John Legere said in a statement. "A combined T-Mobile and MetroPCS will unite two companies with one common vision: challenge the status quo and deliver exceptional wireless experiences for our customers. As America's Un-carrier, we will redefine the wireless industry."
MetroPCS investors will receive $4.06 per share in cash plus shares equivalent to 26 percent of the combined company. Deutsche Telekom will own the remaining 74 percent.
The deal faced challenges from major MetroPCS investors Paulson & Co. and P. Schoenfeld Asset Management, which had asked shareholders to vote thumbs-down. Both firms own hefty stakes in MetroPCs and had.
But, saying it couldn't assure them that it would provide better value as a standalone company.
Under pressure to keep the deal alive,by reducing the amount of debt carried by the combined company from $15 billion to $11.2 billion. It reduced the interest on those loans to better enable the new company to pay them back. And it lengthened the lock-up period, in which it would be restricted from selling shares of the combined company, to 18 months.
Following Deutsche Telekom's new and improved deal, MetroPCS.