T-Mobile US and Sprint have slightly tweaked the merger agreement between the two companies, resulting in Deutsche Telekom having a larger stake in the combined New T-Mobile and a larger overall equity value for the merger deal, the two U.S. carriers announced Thursday.

DT is expected to hold about 43% of New T-Mobile’s shares, with Sprint controlling owner Softbank holding about 24% after surrendering some shares; and the remaining portion of shares, about 33%, will be held by public shareholders.

The merger is expected to close by April 1. But because the merger process has dragged on for so long, some elements of the original merger agreement had to be renegotiated prior to closing, including extending the “outside date” during which the agreement would be in force. T-Mobile US CEO John Legere said on his company’s most recently quarterly call that while the merger agreement was still fully in-effect and the relationship between the companies was strong, the agreement had to be amended to remove each company’s “walkaway ability” and possibly a price change; and that T-Mobile US would “handle that very swiftly after the deal was approved.”

After a federal judge ruled last week that the merger will not adversely affect competition in the consumer wireless market, the merger has cleared what was widely seen as the last major hurdle to closing. The California Public Utility Commission still has to approve the merger.

According to Sprint and T-Mobile US, T-Mobile stock holders will get roughly 11 shares of Sprint for each of their stock, the companies said Thursday. Bloomberg reported that that is a bump-up from a previous ratio of 9.75, and that the equity value of the amended deal is about $37 billion compared with the original agreement of $26.5 billion, according to Bloomberg Intelligence analyst Erhan Gurses.

CNBC reported that according to two sources familiar with the matter, T-Mo owner Deutsche Telekom and SoftBank didn’t want to amend the common shareholder exchange ratio, because such a change would require a new shareholder vote—and that could mean additional months before the closing of a deal that has already been in the approval process for nearly two years, between regulatory approvals and legal action. So the share exchange ratio for common stock holders is unchanged.

Softbank entered into a separate agreement related to the amendment that includes the  surrender approximately 48.8 million T-Mobile shares acquired in the merger to New T-Mobile immediately following the closing of the transaction; but T-Mobile has agreed to re-issue those surrendered shares to SoftBank, reportedly if New T-Mobile hits a stock price of $150 between 2022-2035.

Bloomberg’s sources also said that SoftBank agreed to give Deutsche Telekom a slightly higher ownership stake because Sprint’s financials have deteriorated in the time since the merger was first negotiated.

The amendment has been unanimously approved by the boards of directors of both U.S. carriers, and the two companies said that the amendment “has no impact on T-Mobile’s previously stated outlook on the New T-Mobile’s synergies, long-term profitability and cash generation.”


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