BERLIN, April 22 – Stock prices for Deutsche Telekom dropped 1.5% on Wednesday following news reports about possible merger discussions with T-Mobile US, a deal that could become the largest public company merger in history.
Two sources with knowledge of the situation confirmed to Reuters that preliminary discussions are underway. Deutsche Telekom, which currently owns a controlling 53% interest in T-Mobile, declined to provide comment on Wednesday morning.
The merger speculation was initially disclosed by Bloomberg.
If completed, this transaction would require approval from Germany, Deutsche Telekom’s largest shareholder, and would establish the globe’s most valuable wireless communications company by market worth, operating across both American and European markets.
T-Mobile currently carries a market valuation of approximately $218 billion, compared to Deutsche Telekom’s $166 billion valuation.
According to Bloomberg’s reporting, the preliminary concept involves establishing a new parent company that would make stock offers to acquire both businesses, with existing shareholders maintaining ownership and the combined entity trading on both American and European exchanges.
Germany’s ownership is divided roughly equally between the federal government and state-owned development bank KfW, whose ownership percentage would likely decrease in a combined company.
According to an anonymous source familiar with the negotiations, the merger would establish a massive corporation with enhanced financial flexibility, potentially facilitating future acquisition opportunities.
Over the past twelve months, T-Mobile’s share price has declined by 25%, while Deutsche Telekom’s stock has fallen 10%.
