Sprint and T-Mobile, nearing the finish line in their $26 billion merger, have agreed to give T-Mobile parent Deutsche Telekom a larger stake in the combined company.
T-Mobile-Sprint amended their business combination agreement Thursday, with Sprint parent Softbank Group agreeing to free up about 48.8 million shares of Sprint stock to the combined company, New T-Mobile, after the deal is closed. The agreement will have no effect on other shareholders of both companies -- they will still exchange 9.75 Sprint shares for every T-Mobile share.
Softbank, which controls about 80% of Sprint stock, will now exchange 11.3 Sprint shares for every T-Mobile share. Once the deal is closed, expected on April 1, Softbank will own 24% of the newly combined company, with Deutsche Telekom owning 43%. The remaining 33% of the company will be held by public shareholders.
The completion of the merger will end what has been a two-year ordeal for both companies. Earlier this month a federal court cleared the path for the deal, thwarting attempts by several states attorneys general to block the deal. Later, New York State Attorney General Letitia James, one of the staunchest opponents of the deal, said she would not appeal the federal ruling. However, the deal still can’t close unless California Attorney General Xavier Becerra agrees not to appeal.
According to several reports, Sprint decided to give Deutsche Telekom a larger stake to make up for deteriorating financials at the company as the approval process has dragged on.