Deutsche Telekom (DTEGn.DE) will retain control of T-Mobile (TMUS.O) should Japan’s Softbank (9984.T) liquidate its stake, CEO Tim Hoettges said on Friday. He vowed to take the top spot in the U.S. market.
Speaking at the German group’s annual general meeting, Hoettges said Softbank wants to reduce its 23 percent stake in T-Mobile U.S. to bolster its finances because of the tough economic environment, Reuters reported. Deutsche Telekom has the right of first refusal under a four-year shareholder agreement that took effect when T-Mobile’s $23 billion takeover of Sprint closed in April, he added.
The German company owns 43 percent of T-Mobile but the shareholder pact with Softbank assures strategic control and allows it to consolidate results of its largest subsidiary at group level. “We will become No.1 in the United States,” Hoettges said in an address to the annual general meeting, held online. Talks with Softbank continue, Hoettges added.
Capital markets publication IFR reported Friday that Softbank could liquidate about two thirds of its stake, with T-Mobile likely to repurchase part of that while Deutsche Telekom could buy enough shares to lift its stake above 50 percent, according to Reuters.
The U.S. merger cemented T-Mobile’s position as the country’s number three wireless provider behind AT&T (T.N) and Verizon (VZ.N).
Hoettges also confirmed Deutsche Telekom’s guidance for this year, emphasizing the group’s resilience in the face of the pandemic. He added that its outlook would be updated during the second quarter to account for the U.S. deal. “We want to continue growing,” he said. “In terms of revenue. In terms of earnings from operations. And in terms of free cash flow.”
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