Shareholders of MetroPCS Communications Inc. (PCS) on Wednesday approved the company's merger with T-Mobile USA Inc., a unit of German telecom giant Deutsche Telekom AG (DTEGY.PK).
The shareholder's approval was expected after the terms of the deal were improved. The transaction is expected to close on May 1. The merger had received all required regulatory approvals for the proposed combination in March.
T-Mobile's initial offer was approved by MetroPCS' board, however, PCS shareholders and other advisory firms had raised objections claiming the deal was "inadequate."
It was in last October that T-Mobile USA and MetroPCS agreed to combine, retaining the T-Mobile name. The proposed deal required MetroPCS declare a 1-for-2 reverse stock split and make a cash payment of $1.5 billion, or about $4 per share, to its shareholders. Deutsche Telekom will hold a 74 percent stake while MetroPCS will hold the remaining 26 percent.
Nevertheless, Deutsche Telekom improved its offer by reducing the combined company's debt load by $3.8 billion from a proposed $15 billion. The parent company also agreed to reduce the interest rate on the debt by 50 basis points.
Following the completion of the deal, the company will trade under the legal name T-Mobile US and will be listed on the NYSE under the symbol TMUS.
Bellevue, Washington-based T-Mobile USA, the fourth largest wireless carrier in the US, expects the merger will enable it better compete with Sprint Nextel Corp. (S), AT&T Inc. (T) and Verizon Wireless (VZ).
Last year, Deutsche Telekom failed in an attempt to sell T-Mobile USA in a $39 billion deal to AT&T after US regulators concluded the merger would curb competition for mobile wireless services and raise prices.
PCS is currently trading at $11.63, down $0.07 or 0.56%, on the NYSE.
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