U.S. T-Mobile - MetroPCS clear final regulatory hurdle
T-Mobile USA and MetroPCS, the fourth and fifth largest cellular networks in the U.S., are set to merge after the third and final regulator gave its thumbs-up to the deal.
First reported by Bloomberg, the three regulators involved in the scrutiny process have now completed their inspection, allowing the deal to close before the fiscal second quarter, as planned.
Now that the Committee on Foreign Investment has given its approval, only a vote among MetroPCS shareholders to sign off on the deal is holding up the merger, which is set to be voted upon on April 12.
The two companies were stalled temporarily during what turned out to be a normal holding process, in which the U.S. Justice Department asked the Federal Communications Commission to hold off on its review in November.
In a letter, the Justice Department's National Security Division asked for a deferring of the merger as part of a common procedure when a non-U.S. company is involved in a takeover of or merger with a U.S. firm, as is the case here. (A similar letter was sent to the FCC regarding the Softbank-Sprint deal.)
The review went ahead, and regulators began their scrutiny of the T-Mobile-MetroPCS deal only days later. The FCC was quick to approve the deal between the two companies only a few weeks later.The T-Mobile-MetroPCS deal will go ahead in acomplicated stock-and-cash deal, in which Deutsche Telekom, T-Mobile USA's Germany-based parent company, will own 74 percent of MetroPCS' common stock. The move initially came as a bit of a surprise considering rumors suggesting that the German company wastrying to leave the U.S. market.
But the deal won't go through without a few caveats: T-Mobile USA plans to cut a large number of staff at its Bellevue, Wash., headquarters once the merger completes,according to reports.
That comes after around 4,200 jobs were cut across the cellular network during the last calendar year.
The fully merged U.S. carrier, which would have a combined subscriber base of roughly 42 million users, had an enterprise value of about $30.5 billion, according to Bloomberg, based on MetroPCS' closing price yesterday.