T-Mobile’s $26 billion Merger with with Sprint

PJT Partners is acting as financial advisor to T-Mobile and rendered a fairness opinion to its Board of Directors. Goldman Sachs is acting as financial advisor to Deutsche Telekom and T-Mobile and rendered a fairness opinion to the T-Mobile Board of Directors. Deutsche Bank also acted as financial advisor to T-Mobile. Wachtell, Lipton, Rosen & Katz is providing legal counsel to T-Mobile and Deutsche Telekom, with Cleary Gottlieb and DLA Piper serving as regulatory counsel. Evercore is acting as financial advisor to a committee of independent directors of T-Mobile and rendered a fairness opinion, and Latham & Watkins is providing legal counsel to the committee of independent directors. Richards, Layton and Finger is serving as Delaware Counsel. Morgan Stanley served as financial advisor to Deutsche Telekom. Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, and RBC are providing T-Mobile with committed debt financing to support the transaction, and PJT Partners is advising T-Mobile on the debt financing associated with the transaction. The Raine Group LLC is acting as lead financial advisor to Sprint. J.P. Morgan is also acting as a financial advisor to Sprint. Centerview Partners LLC is acting as financial advisor to the Independent Transaction Committee of the Board of Directors of Sprint. The Raine Group LLC, J.P. Morgan and Centerview Partners LLC each rendered fairness opinions to the Board of Directors of Sprint. Morrison & Foerster LLP is lead legal counsel to Sprint and for SoftBank Group. Goodwin Procter LLP is legal counsel to the Independent Transaction Committee of the Board of Directors of Sprint. Skadden, Arps, Slate, Meagher & Flom LLP is regulatory co-counsel and Potter Anderson Corroon LLP is Delaware Counsel. Mizuho Securities Co., Ltd. and SMBC Nikko Securities Inc. are acting as financial advisors to SoftBank Group.

T-Mobile US (NASDAQ: TMUS) and Sprint Corporation (NYSE: S) have entered into a definitive agreement to merge in an all-stock transaction at a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share or the equivalent of 9.75 Sprint shares for each T-Mobile US share. Based on closing share prices on April 27, this represents a total implied enterprise value of approximately $59 billion for Sprint and approximately $146 billion for the combined company. The new company will have a strong closing balance sheet and a fully funded business plan with a strong foundation of secured investment grade debt at close.

The combined company will be named T-Mobile, and it will be a force for positive change in the U.S. wireless, video, and broadband industries. The combination of spectrum holdings, resulting network scale, and expected run rate cost synergies of $6+ billion, representing a net present value (NPV) of $43+ billion will supercharge T-Mobile’s Un-carrier strategy to disrupt the marketplace and lay the foundation for U.S. companies and innovators to lead in the 5G era.

The New T-Mobile will have the network capacity to rapidly create a nationwide 5G network with the breadth and depth needed to enable U.S. firms and entrepreneurs to continue to lead the world in the coming 5G era, as U.S. companies did in 4G. The new company will be able to light up a broad and deep 5G network faster than either company could separately. T-Mobile deployed nationwide LTE twice as fast as Verizon and three times faster than AT&T, and the combined company is positioned to do the same in 5G with deep spectrum assets and network capacity.

The combined company will have lower costs, greater economies of scale, and the resources to provide U.S. consumers and businesses with lower prices, better quality, unmatched value, and greater competition. The New T-Mobile will employ more people than both companies separately and create thousands of new American jobs.

Following closing, the new company will be headquartered in Bellevue, Wash., with a second headquarters in Overland Park, Kan. John Legere, current President and Chief Executive Officer of T-Mobile US and the creator of T-Mobile’s successful Un-carrier strategy, will serve as Chief Executive Officer, and Mike Sievert, current Chief Operating Officer of T-Mobile, will serve as President and Chief Operating Officer of the combined company. The remaining members of the new management team will be selected from both companies during the closing period. Tim Höttges, current T-Mobile US Chairman of the Board, will serve as Chairman of the Board for the new company. Masayoshi Son, current SoftBank Group Chairman and CEO, and Marcelo Claure, current Chief Executive Officer of Sprint, will serve on the board of the new company.

The transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close no later than the first half of 2019.

Wachtell advised T-Mobile and its German parent company Deutsche Telekom with Adam Emmerich (Picture)

Morrison Foerster is acting for Sprint and its controlling shareholder SoftBank Group with a team led by Robert Townsend, Brandon Parris, David Slotkin, Ken Siegel, Mike O’Bryan, Scott Lesmes, Ivan Smallwood (M&A), David Meyer, Jeff Jaeckel (Antitrust), Nick Spiliotes (Regulatory), Bernie Pistillo (Tax), Mark Wojciechowski (Finance), Mike Miller (Antitrust), Paul Jahn (IP&IT) and Domnick Bozzetti (Employment / Benefit).

Cleary Gottlieb advised T-Mobile and Deutsche Telekom with Mark Nelson, George Cary, Jeremy Calsyn and Dan Culley.

Weil is advising Evercore, the financial adviser to T-Mobile’s committee of independent directors, with a team including Michael Aiello and Eoghan Keenan.

Latham & Watkins is advising the committee of independent directors, with Charles Ruck, Daniel Rees (M&A), Keith Halverstam and Benjamin Cohen, Greg Robins, James Barker, Matthew Brill (TMT).

Steven Croley (Compliance) Michael Egge (Antitrust) Michele Johnson (Compliance).

Fried Frank acted as counsel to Goldman Sachs as financial advisor to T-Mobile with a team including Philip Richter and Warren S. de Wied and included corporate associate Roy Tannenbaum and corporate law clerk Asiya M. Ubaid.

Cahill is representing the lead arrangers in connection with commitments for up to $38 billion of secured and unsecured debt financing being provided to T-Mobile to support the recently announced T-Mobile/Sprint merger transaction

 

Involved fees earner: Robert Townsend – Morrison Foerster; Brandon Parris – Morrison Foerster; David Slotkin – Morrison Foerster; Ken Siegel – Morrison Foerster; Michael O’Bryan – Morrison Foerster; Scott Lesmes – Morrison Foerster; Ivan Smallwood – Morrison Foerster; David Meyer – Morrison Foerster; Jeff Jaeckel – Morrison Foerster; Michael Miller – Morrison Foerster; Nick Spiliotes – Morrison Foerster; Bernie Pistillo – Morrison Foerster; Paul Jahn – Morrison Foerster; Domnick Bozzetti – Morrison Foerster; David Slotkin – Morrison Foerster; Philip Richter – Fried Frank Harris Shriver & Jacobson; Warren de Wied – Fried Frank Harris Shriver & Jacobson; Roy Tannenbaum – Fried Frank Harris Shriver & Jacobson; Michael Aiello – Weil, Gotshal & Manges; Eoghan Keenan – Weil, Gotshal & Manges; Adam Emmerich – Wachtell, Lipton, Rosen & Katz; Charles Ruck – Latham & Watkins; Daniel Rees – Latham & Watkins; Keith Halverstam – Latham & Watkins; Benjamin Cohen – Latham & Watkins; Greg Robins – Latham & Watkins; James Barker – Latham & Watkins; Matthew Brill – Latham & Watkins; Steven Croley – Latham & Watkins; Michele Johnson – Latham & Watkins; Michael Egge – Latham & Watkins; Mark Nelson – Cleary Gottlieb Steen & Hamilton; George Cary – Cleary Gottlieb Steen & Hamilton; Jeremy Calsyn – Cleary Gottlieb Steen & Hamilton; Daniel Culley – Cleary Gottlieb Steen & Hamilton;

Law Firms: Morrison Foerster; Fried Frank Harris Shriver & Jacobson; Weil, Gotshal & Manges; Wachtell, Lipton, Rosen & Katz; Latham & Watkins; Cleary Gottlieb Steen & Hamilton;

Clients: Goldman, Sachs & Co.; Softbank Corp.; Sprint Corporation; Evercore Partners; Deutsche Telekom; T-Mobile Usa, Inc.; T-Mobile USA, Inc. Committee of independent directors;

 

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Author: Ambrogio Visconti