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May 01, 2013

T-Mobile Completes MetroPCS Acquisition

By Robbie Pleasant, TMCnet Contributor

T-Mobile (News - Alert) has finally done it, with its acquisition of MetroPCS set to close. As a result, the resulting T-Mobile US Inc. has hit the market, with a nice opening stock and great potential for the mobile market.



T-Mobile US Inc. is the newly formed combination of T-Mobile USA and MetroPCS, created from the acquisition deal. The deal itself is structured as a reverse merger, with the smaller MetroPCS technically acquiring T-Mobile USA from Deutsche Telekom AG (News - Alert), in order to gain its own stock listing. However, 74 percent of the new company still belongs to Deutsce Telekom.

This adds nine million MetroPCS customers to T-Mobile’s own 34 million, although it still lacks behind Sprint (News - Alert) Nextel Corp. as the third biggest U.S.. cell phone carrier. Customers of either company need not worry about major changes immediately, as the MetroPCS brand will remain for now, but the network will slowly be shut down in the coming years and replaced by T-Mobile’s own coverage and data.

The stock for the company is under the new ticker symbol “TMUS” on the New York Stock Exchange, and was resting at $16.45 at the time this article was written. That’s an increase of around five percent from MetroPCS’ shares since closing. This is a nice opening for the company, and it’s likely to pick up more as the combined company gains momentum.

MetroPCS shareholders each received $4.05 in cash and half a TMUS share for each of their MetroPCS shares. Although many find the offer inadequate at first, T-Mobile reduced the debt it would transfer to the new company and the interest rate of said debt, earning shareholder approval.

While this is a smaller payout than AT&T (News - Alert) offered two years ago, the 2011 deal fell through due to opposition from regulators. Whether or not they’re regretting that decision now has yet to be seen, but this is still a nice end result for the two companies nonetheless. Together, they may not be able to rule the galaxy but they’re definitely able to extend their wider and offer new services, helping improve the companies and help customers simultenously.




Edited by Jamie Epstein
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