T-Mobile and Sprint agreed to merge in an all-stock transaction at a fixed exchange ratio of 9.75 Sprint shares for each T-Mobile share, a total implied enterprise value of approximately $59 billion for Sprint and approximately $146 billion for the combined company.
Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley and RBC will provide T-Mobile with committed debt financing to support the transaction.
The combined company will be named T-Mobile and will be headquartered in Bellevue, WA, with a second headquarters in Overland Park, KS. John Legere, current president and CEO of T-Mobile, will serve as CEO, and Mike Sievert, current COO of T-Mobile, will serve as president and COO of the combined company. The remaining members of the new management team will be selected from both companies during the closing period.
“This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience – and do it all so much faster than either company could on its own,” Legere said. “As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf.”
Both boards of directors have approved the transaction. Deutsche Telekom and SoftBank Group are expected to hold approximately 42% and 27% of diluted economic ownership of the combined company, respectively, with the remaining approximately 31% held by the public.
PJT Partners, Goldman Sachs and Deutsche Bank acted as financial advisors to T-Mobile, with the former two rendering fairness opinions to the board of directors. Wachtell, Lipton, Rosen & Katz acted as T-Mobile’s legal counsel.
The Raine Group, JPMorgan and Centerview Partners acted as lead financial advisors to Sprint and rendered fairness opinions to the board of directors. Morrison & Foerster served as lead legal counsel to Sprint.