SoftBank announced on Tuesday it has gained a 4.5% equity stake in Deutsche Telekom as part of a new long-term partnership.
The partnership will see both telcos enter into an equity share agreement, which will entail Deutsche Telekom acquiring around 45 million T-Mobile US shares from SoftBank in exchange for issuing 225 million new Deutsche Telekom shares to SoftBank.
In a subsequent step, Deutsche Telekom will also exercise call options to acquire an additional 20 million T-Mobile US shares from SoftBank by re-investing $2.4 billion of expected disposal proceeds from the announced sale of T-Mobile Netherlands.
Deutsche Telekom is the parent company of T-Mobile US.
As a result of these transactions, SoftBank will become a 4.5% shareholder in Deutsche Telekom while its equity stake in T-Mobile US will drop to 3.3%. The deal will also see SoftBank become the second largest private shareholder of Deutsche Telekom.
According to SoftBank, the Japanese conglomerate’s 300 portfolio companies will gain access to approximately 240 million new customers across Europe and the US.
“The transaction diversifies our telecoms exposure and results in SoftBank becoming DT’s second largest private shareholder, while retaining meaningful exposure to high-growth TMUS,” SoftBank COO Marcelo Claure said.
The move follows SoftBank last year selling around two-thirds of its T-Mobile US shares to Deutsche Telekom. Last year’s deal was split into two parts: The first being SoftBank Group selling over 198 million of its T-Mobile US shares to T-Mobile US itself, while the second was an option to buy an additional 100 million T-Mobile US shares.
At the time of the sale, SoftBank had only owned a stake in T-Mobile for two months after the telco merged with the then-SoftBank owned Sprint.
Last month, SoftBank Group reported a 39% year-on-year dip for its first-quarter results, posting ¥761.5 billion in net income. This was despite the company posting almost ¥1.48 trillion in net sales for the quarter, which was 15.6% more when compared to the same period last year.
