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SoftBank To Become 4.5% Shareholder In Deutsche Telekom

SoftBank Group Corp. (SFTBY.PK,SFTBF.PK) said Tuesday that it has reached a strategic partnership and equity share swap agreement with Deutsche Telekom AG (DTEGY.PK).

Under the strategic partnership, SoftBank's more than 300 portfolio companies gain access to an additional, about 240 million Deutsche Telekom customers across Europe and the US.

As per the equity share swap deal, Deutsche Telekom will exercise a portion of its call options that were granted by SoftBank in connection with their June 2020 agreement. Deutsche Telekom will acquire about 45 million T-Mobile US or "TMUS" shares from SoftBank in exchange for issuing 225 million new Deutsche Telekom shares to SoftBank from its authorized capital.

Deutsche Telekom envisages exercising call options to acquire another approximately 20 million TMUS shares from SoftBank by re-investing $2.4 billion of expected disposal proceeds from the announced sale of T-Mobile Netherlands.

As a result of the transactions, SoftBank will become a 4.5% shareholder in Deutsche Telekom and retain a 3.3% equity stake in TMUS, which could increase to 6.9% through True-Up Shares, if TMUS stock price were to hit certain milestones.

The transaction diversifies SoftBank's telecoms exposure across Japan, Europe and the US, with a 41% ownership of SoftBank Corp., 4.5% of Deutsche Telekom and 3.3% of TMUS.

SoftBank said it will have access to a total of nearly 300 million customers across the globe, including approximately 55 million from SoftBank Corp., approximately 95 million from Deutsche Telekom and approximately 140 million from TMUS.

Deutsche Telekom will support a proposal by SoftBank to have Marcelo Claure elected to the Supervisory Board of Deutsche Telekom at the next annual general meeting. Marcelo Claure is as Corporate Officer, Executive Vice President & Chief Operating Officer of SoftBank Group Corp. and Chief Executive Officer of SoftBank Group International.

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