February 20, 2020 — BELLEVUE, Wash. & OVERLAND PARK, Kan.–(BUSINESS WIRE)–T-Mobile US, Inc. (NASDAQ: TMUS) and Sprint Corporation (NYSE: S) today announced that they have entered into an amendment to their definitive Business Combination Agreement to create the New T-Mobile. The Boards of Directors of T-Mobile and Sprint have unanimously approved the amendment. 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.
A separate arrangement entered into by SoftBank Group Corp. in connection with the amendment will result in an effective exchange ratio of approximately 11.00 Sprint shares for each T-Mobile share immediately following the closing of the merger, an increase from the originally agreed 9.75 shares. This is a result of SoftBank agreeing to surrender approximately 48.8 million T-Mobile shares acquired in the merger to New T-Mobile immediately following the closing of the transaction, making SoftBank’s effective ratio 11.31 Sprint shares per T-Mobile share. Sprint shareholders other than SoftBank will continue to receive the original fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share, or the equivalent of approximately 9.75 Sprint shares for each T-Mobile share.
Immediately following the closing, and after the surrender of shares by SoftBank, Deutsche Telekom and SoftBank are expected to hold approximately 43% and 24%, respectively, of the fully diluted New T-Mobile shares, with the remaining approximately 33% held by public shareholders.
T-Mobile has agreed to re-issue to SoftBank the previously surrendered shares upon the achievement of certain stock price milestones by New T-Mobile during a specified measurement period, and subject to certain additional terms, as outlined in the letter agreement that will be filed by each of T-Mobile and Sprint with the SEC.
In addition, the amendment extends the “outside date” under the Business Combination Agreement to July 1, 2020, and modifies certain other provisions of the Business Combination Agreement as described in the companies’ SEC filings.
“Today’s announcement is another significant step forward toward finally closing this transaction! Throughout this journey, T-Mobile and Sprint have been singularly focused on one thing: building a supercharged Un-carrier that will offer U.S. consumers a broad and deep nationwide 5G network, more choice and greater competition. We are now on the threshold of achieving our goal. And did I mention how fun it’s going to be sticking it to Dumb, Dumber and Big Cable along the way? This is going to be epic!” said John Legere, CEO of T-Mobile.
“With today’s agreement in place, we are now turning our attention toward our goal of closing this transaction and creating the New T-Mobile as early as April 1, 2020,” said Mike Sievert, COO and President of T-Mobile, and appointed CEO of the company starting on May 1, 2020. “We are on the verge of being able to do what we’ve set out to do from day one — reshape a broken wireless industry and create the new standard for consumers when it comes to value, speed, quality and service. The New T-Mobile is literally going to change wireless for good and now we’re almost ready to get to the fun part: bringing our teams together, building this supercharged Un-carrier and becoming the envy of the wireless industry and beyond!”
“Completing this step is yet another critical milestone in securing Sprint’s future, and it brings us one step closer to closing this historic transaction that has been years in the making,” said Marcelo Claure, Sprint Executive Chairman. “I’m incredibly thankful for the perseverance and resilience of everyone that has gotten us to this point.”
The T-Mobile and Sprint combination remains subject to certain closing conditions. Additional information can be found at www.NewTMobile.com.
PJT Partners and Goldman Sachs are acting as financial advisors to T-Mobile. Wachtell, Lipton, Rosen & Katz is providing legal counsel to T-Mobile and Deutsche Telekom. Evercore is acting as financial advisor to the committee of independent directors of T-Mobile and Latham & Watkins is providing legal counsel to the committee of independent directors. Morgan Stanley is serving as a financial advisor to Deutsche Telekom.
The Raine Group LLC is acting as lead financial advisor to Sprint. J.P. Morgan is also acting as a financial advisor to Sprint. Morrison & Foerster LLP is providing legal counsel to Sprint and SoftBank.