Deutsche Telekom bulks up T-Mobile US stake as it sells Dutch unit

A man walks past the logo of Deutsche Telekom AG at the headquarters of German telecommunications giant in Bonn, Germany

Deutsche Telekom (DTEGn.DE)struck a share-swap deal with Softbank (9984.T) to increase its stake in U.S. unit T-Mobile (TMUS.O) 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 (TEL2b.ST) in 2018 but never considered the unit, which ranked a distant third behing market leaders KPN (KPN.AS) and Vodafone Ziggo (VOD.L), 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 (TEL2b.ST), which had retained a 25% stake in T-Mobile Netherlands, also sold out.

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