Merging T-Mobile With MetroPCS Wins Approval From U.S.Todd Shields and Scott Moritz
Deutsche Telekom AG’s proposal to combine its T-Mobile USA unit with smaller MetroPCS Communications Inc. won approval from U.S. competition and telecommunications authorities.
Allowing the fourth- and fifth-largest U.S. wireless carriers to combine will benefit American consumers as the mobile market continues to strengthen, Federal Communications Commission Chairman Julius Genachowski said in an e-mailed statement yesterday. Benefits include more high-speed wireless service, the agency said in an order.
The combination is unlikely to harm consumers, and may help T-Mobile become a stronger competitor, the Justice Department said in an e-mailed news release announcing it had closed its investigation into the deal.
“The FCC’s approval marks another significant milestone in bringing our two companies together,” John Legere, president of T-Mobile, said in an e-mailed statement. “We look forward to completing the transaction.”
The proposed combination needs approval of shareholders who are to meet on April 12, according to the statement. It urged shareholders to throw out white proxy cards distributed by “a dissident stockholder” and vote for the deal. Failure to vote has the same effect as voting against the combination, according to the statement.
MetroPCS dropped 24 cents, or 2.3 percent, in New York trading yesterday to $10.26, 29 percent below its October high as news of the deal broke. Deutsche Telekom advanced 0.1 percent to 8.39 euros at 9:05 a.m. in Frankfurt.
Paulson & Co., the biggest investor in MetroPCS with 36.3 million, or 9.9 percent, of shares has said it wants to block the deal. The combined company would hold too much debt, John Paulson, founder and majority owner, said in a Feb. 28 letter to the MetroPCS and Deutsche Telekom boards.
Armel Leslie, a spokesman for Paulson & Co., didn’t reply to an e-mail and voice mail seeking comment.
The deal aims to reinvigorate T-Mobile, the target of a failed purchase attempt by second-largest U.S. wireless carrier AT&T Inc. in 2011. T-Mobile will take on subscribers and capacity from MetroPCS to compete with AT&T, market leader Verizon Wireless and Sprint Nextel Corp., the third-largest U.S. provider.
Deutsche Telekom, Germany’s largest telephone company, on Oct. 3 announced the deal that will leave the Bonn-based company with 74 percent of the new business after paying MetroPCS shareholders $1.5 billion in cash.