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T-Mobile and MetroPCS Announce Merger
      #43458 - 10/03/12 08:38 AM

Surprise! T-Mobile and MetroPCS made quick work of merger talks and the companies have announced the somewhat complicated merger. Though T-Mobile will own the lion's share of the newly combined company that will operate under the T-Mobile name, the merger is described as a reverse split with plans for MetroPCS to eventually acquire the controlling share. Though the newly combined company will still be smaller than the number 3 US carrier, Sprint, it will give T-Mobile access to sorely needed LTE spectrum across the US. T-Mobile's president will reign as president of the merged company.

According to T-Mobile's press release:

"Deutsche Telekom’s supervisory board and MetroPCS’ board of directors unanimously approved the transaction. The transaction is structured as a recapitalization, in which MetroPCS will declare a 1 for 2 reverse stock split, make a cash payment of $1.5 billion to its shareholders (approximately $4.09 per share prior to the reverse stock split) and acquire all of T-Mobile’s capital stock by issuing to Deutsche Telekom 74% of MetroPCS’ common stock on a pro forma basis. Deutsche Telekom has also agreed to roll its existing intercompany debt into new $15 billion senior unsecured notes of the combined company, provide the combined company with a $500 million unsecured revolving credit facility and provide a $5.5 billion backstop commitment for certain MetroPCS third-party financing transactions.

The combined company will be a stronger competitor and will be well-positioned to drive future growth. Based on analyst consensus estimates for 2012, the combined company is expected to have approximately 42.5 million subscribers, $24.8 billion of revenue, $6.3 billion of adjusted EBITDA, $4.2 billion of capital expenditures and $2.1 billion of free cash flow (defined as EBITDA less capital expenditures) in 2012."

Here's the full press release link: http://newsroom.t-mobile.com/articles/t-mobile-metropcs-combine




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