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Deutsche Telekom inks $7bn share swap deal with SoftBank

Deutsche Telekom inks $7bn share swap deal with SoftBank

Mubasher: Deutsche Telekom has signed a share-swap deal worth $7 billion with SoftBank Group to raise its stake in the US unit T-Mobile, Reuters reported on Tuesday. 

The deal raises the German group's ownership in T-Mobile by 5.3% to 48.4%, bringing it closer to its goal of gaining majority control over the $170 billion US telecoms operator, which generates three-fifths of group sales and is its most profitable unit. 

In exchange, SoftBank will receive cash and a 4.5% stake in Deutsche Telekom, building a direct shareholder relationship after the Japanese group sold its US Sprint unit to T-Mobile in a deal that closed in early 2020.

Under the deal, Deutsche Telekom plans to issue 225 million new shares to SoftBank at a price of EUR 20 a share, higher by 12% than their current market price. SoftBank has agreed not to sell its shares in Deutsche Telekom until the end of 2024.

Moreover, Deutsche Telekom also announced the sale of its Dutch unit T-Mobile Netherlands to a consortium of private equity firms Apax and Warbug Pincus for EUR 5.1 billion ($6.1 billion).