Creates Only Company with Network Capacity Needed to Rapidly Launch Nationwide 5G Network with Breadth and Depth Critical to Extend U.S. Global Internet Leadership in the 5G Era
Supercharges the Un-carrier Strategy to Deliver Lower Prices, Unmatched Value, and Greater Competition in Wireless, Video, and Broadband
Combination Will Create Thousands of American Jobs and Boost U.S. Economic Growth with Planned $40 Billion Investment in its Business and Next-Generation 5G Network
John Legere to Serve as Chief Executive Officer and
Mike Sievert to Serve as President and Chief Operating Officer of the Combined Company
anunciado they 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.T-Mobile US (NASDAQ: TMUS) and Sprint Corporation (NYSE: S) today
The New T-Mobile will have the network capacity to rapidly create a red 5G nacional 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.
"This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience - and do it all so much faster than either company could on its own," said John Legere. "As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf."
"The combination of these two dynamic companies can only benefit the U.S. consumer. Both Sprint and T-Mobile have similar DNA and have eliminated confusing rate plans, converging into one rate plan: Unlimited," said Marcelo Claure. "We intend to bring this same competitive disruption as we look to build the world's best 5G network that will make the U.S. a hotbed for innovation and will redefine the way consumers live and work across the U.S., including in rural America. As we do this, we will force our competitors to follow suit, as they always do, which will benefit the entire country. I am confident this combination will spur job creation and ensure opportunities for Sprint employees as part of a larger, stronger combined organization, and I am thrilled that Kansas City will be a second headquarters for the merged company."
Creating #5GforAll – the Only Broad and Deep 5G Nationwide Network
It is critically important that America and American companies lead in the 5G era. Early U.S. leadership in 4G fueled a wave of American innovation and entrepreneurship that gave rise to today's global mobile Internet leaders, creating billions in economic value and job growth. America's early 4G leadership is credited with creating 1.5 million jobs and adding billions to the U.S. GDP. With 5G, the stakes are even higher - because 5G will be even more transformational.
Only the combined company will have the network capacity required to quickly create a broad and deep 5G nationwide network in the critical first years of the 5G innovation cycle - the years that will determine if American firms lead or follow in the 5G digital economy. With Sprint's expansive 2.5 GHz spectrum, T-Mobile's nationwide 600 MHz spectrum, and other combined assets, the New T-Mobile plans to create the highest capacity mobile network in U.S. history. Compared to T-Mobile's network today, the combined company's network is expected to deliver 15x faster speeds on average nationwide by 2024, with many customers experiencing up to 100x faster speeds than early 4G.
Neither company standing alone can create a nationwide 5G network with the breadth and depth required to fuel the next wave of mobile Internet innovation in the U.S. and answer competitive challenges from abroad.
Neither can AT&T and Verizon in the near term, even though they will still respectively own 34% and 172% more spectrum than the combined company. Even with their vast resources, AT&T and Verizon cannot rapidly build nationwide 5G and their planned 5G networks will only be available sporadically in just a handful of very limited areas. To build nationwide 5G, they either have to kick current customers off LTE, which would take years, or use a type of spectrum (millimeter wave) that can only carry a signal 2,000 feet from a cell site - versus multiple miles for other spectrum - making it nearly impossible for either of them to create a truly nationwide 5G network quickly.
Ubiquitous high-speed 5G service and Internet of Things (“IoT”) capabilities will ignite innovation across industries and create the conditions for U.S. firms and innovators to lead the globe in the 5G era.
"Going from 4G to 5G is like going from black and white to color TV," added Claure. "It's a seismic shift - one that only the combined company can unlock nationwide to fuel the next wave of mobile innovation."
5G for All will unleash incredible benefits and capabilities for consumers and businesses. Imagine, for example, augmented reality heads-up displays that see everything you do, and provide real-time cloud-driven information about the people and objects around you. Imagine never losing anything again because low-cost sensors with decade long battery life are embedded in everything you own. Imagine an earpiece providing real-time translation as a friend speaks to you in another language. Imagine environmental sensors in infrastructure and for agriculture having a profound impact on productivity.
Shifting the Un-carrier Strategy Into Overdrive – Reducing Prices and Driving More Competition
The new company expects prices to drop as competition heats up. The New T-Mobile will have lower costs, greater economies of scale, and unprecedented network capacity - a winning combination that should make wireless, and adjacent industries like cable and broadband, more affordable for everyone.
The combination will dramatically accelerate T-Mobile's successful Un-carrier strategy, which is built around listening to customers and solving their pain points. It will also leverage Sprint's incredible spectrum assets and strong DNA.
The deal will create more competition and unmatched value for customers across the country. And, existing T-Mobile and Sprint customers will benefit from increased speeds, coverage, and performance as the two companies' networks combine.
Wireless, broadband, and video markets are rapidly converging. AT&T is now the largest TV provider in the country. Comcast added more wireless phone customers last year than AT&T and Verizon combined, and Charter is launching wireless this year. And, more than 1 in 10 Americans (12%) use wireless as their only Internet or broadband connection, freeing themselves from the grip of the traditional, uncompetitive in-home broadband providers.
"This isn't a case of going from 4 to 3 wireless companies - there are now at least 7 or 8 big competitors in this converging market. And in 5G, we'll go from 0 to 1. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G," added Legere. "We're confident that, once regulators see the compelling benefits, they'll agree this is the right move at the right time for consumers and the country."
In this rapidly converging marketplace, the new company will bring more choice and competition – for all consumers, including three key underserved areas:
- Rural communities. Rural Americans seldom have a choice of more than one or two wireless, broadband, or cable providers. The New T-Mobile will end that with increased reach and plans to open hundreds of new stores in rural communities, creating thousands of new jobs. Millions of Americans in rural communities will have more choice and competition, where they may have none today.
- Broadband. 51% of Americans have only one high-speed broadband option - no choice at all! The combined company will create a viable alternative for millions by enabling mobile connections that rival broadband, driving prices lower and improving service.
- Business and government wireless services. Today, Verizon and AT&T dominate this category with 4x more customers than Sprint and T-Mobile added together. With its assets and capabilities, the new company will unlock real competition for business and government customers.
Driving Significant U.S. Job Growth
From the first day Sprint and T-Mobile combine and every year thereafter, the new company will employ more people in the U.S. than both companies would separately. More than 200,000 people will work on behalf of the combined company in the U.S. at the start. And, the New T-Mobile plans to invest up to $40 billion in its new network and business in the first three years alone, a massive capital outlay that will fuel job growth at the new company and across related sectors. This is 46% more than T-Mobile and Sprint spent combined in the past three years.
This combination will also force AT&T, Charter, Comcast, Verizon, and others to make investments of their own to compete, driving billions more in accelerated investment.
Five years ago, T-Mobile merged with MetroPCS to compete in the 4G era - a transaction that has resulted in substantial job growth. Three times the number of people work on MetroPCS today compared to the time of the acquisition in 2013. With that track record, the New T-Mobile will accelerate long-term economic stimulus for the U.S. in the 5G era - ultimately leading to the creation of thousands of American jobs and supporting business opportunities for the U.S. economy.
5G is expected to create 3 million new U.S. jobs and $500 billion in economic growth by 2024, according to a report from CTIA, and the combined company will be a catalyst in driving that massive economic stimulus.
Transaction Details and Financial Profile
The new company expects to create substantial value for T-Mobile and Sprint shareholders through an expected $6+ billion in run rate cost synergies, representing a net present value (NPV) of $43+ billion, net of expected costs to achieve such cost synergies. This transaction will also enhance the financial position of the combined company. Highlights include:
- Pro Forma 2018E Service Revenue 1 of $53-57 billion
- Pro Forma 2018E Adjusted EBITDA1,2 of $22-23 billion
- Pro Forma 2018E Adjusted EBITDA1,2 Margin of 40-42% with a longer-term target of 54-57%
- Pro Forma 2018E Net Debt3 of $63-65 billion with a streamlined single-silo corporate debt structure
- Fully funded business plan with significant liquidity at close
The Boards of Directors of T-Mobile and Sprint have approved the transaction. Deutsche Telekom and SoftBank Group are expected to hold approximately 42% and 27% of diluted economic ownership of the combined company, respectively, with the remaining approximately 31% held by the public. The Board will consist of 14 directors, 9 nominated by Deutsche Telekom and 4 nominated by SoftBank Group, including Masayoshi Son, Chairman and CEO of SoftBank Group, and Marcelo Claure, CEO of Sprint. John Legere, CEO of the New T-Mobile, will also serve as a director. Upon consummation of the transaction, the combined company is expected to trade under the (TMUS) symbol on the NASDAQ.
The new company will have some of the most iconic brands in wireless – T-Mobile, Sprint, MetroPCS, Boost Mobile, Virgin Mobile – and will determine brand strategy after the transaction closes.
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.
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.
Conference Call / Webcast Information
T-Mobile and Sprint will host a conference call for investors and media at 12:30 PM Eastern Time today (9:30 AM Pacific Time) to discuss this announcement.
A live audio webcast of the call can be accessed at www.Allfor5G.com. To submit questions via Twitter, send a tweet to @JohnLegere, @MarceloClaure, @TMobile, or @Sprint using #5GforAll. Investors and media can access the teleconference by calling 888-599-8685 (U.S. Toll Free) or +1 323-794-2415 (International). The access code for the call is 894223.
The conference call will be available for replay and can be accessed from www.Allfor5G.com or by dialing 888-203-1112 (U.S. Toll Free) or +1 719-457-0820 (International). The access code for the replay is 8152135.
Acerca de T-Mobile
Como El Un-carrier de EE.UU., T-Mobile US, Inc. (NASDAQ: TMUS) está redefiniendo la forma en que los consumidores y las empresas adquieren los servicios de telefonía móvil por medio de liderazgo en la innovación de productos y servicios. Nuestra avanzada red nacional 4G LTE brinda experiencias excepcionales de servicio móvil a 72.6 millones de clientes que no están dispuestos a transigir en calidad y en valor. Basada en Bellevue, Washington, T-Mobile US ofrece servicios a través de sus subsidiarias y opera sus marcas principales, T-Mobile y MetroPCS. Para obtener más información, visita http://es.t-mobile.com.
Sprint (NYSE: S) is a communications services company that creates more and better ways to connect its customers to the things they care about most. Sprint served 54.6 million connections as of Dec. 31, 2017, and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; leading no-contract brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Today, Sprint's legacy of innovation and service continues with an increased investment to dramatically improve coverage, reliability and speed across its nationwide network and commitment to launching the first 5G mobile network in the U.S. You can learn more and visit Sprint at www.sprint.com o www.facebook.com/sprint y www.twitter.com/sprint.
1 Proforma service revenue and Adjusted EBITDA measures do not include the impacts of ASC606 revenue recognition accounting changes.
2 T-Mobile is not able to forecast net income on a forward looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP net income including, but not limited to, income tax expense, stock based compensation expense and interest expense. El EBITDA ajustado no debe usarse para predecir los ingresos netos ya que la diferencia entre las dos medidas es variable.
3 Proforma net debt reflects total expected debt (excluding tower obligations, premiums, discounts and issuance costs) less cash and cash equivalents
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T-Mobile US, Inc.
Información adicional importante
En relación con la transacción propuesta, T-Mobile US, Inc. ("T-Mobile") presentará una declaración de inscripción en el formulario S-4, que incluirá una declaración de solicitud de consentimiento conjunto de T-Mobile y Sprint Corporation ("Sprint"), que además constituye un prospecto de T-Mobile (la "declaración de solicitud de consentimiento conjunto/prospecto") y cada una de las partes presentará otros documentos relacionados con la transacción propuesta ante la Comisión de Valores y Bolsa ("SEC") de los EE. UU. SE INSTA A LOS INVERSIONISTAS Y TITULARES DE VALORES A QUE LEAN LA DECLARACIÓN/PROSPECTO DE SOLICITUD DE CONSENTIMIENTO CONJUNTO Y OTRA DOCUMENTACIÓN PERTINENTE PRESENTADA ANTE LA SEC CUANDO ESTÉ DISPONIBLE YA QUE CONTENDRÁ INFORMACIÓN IMPORTANTE. Una vez cerrado el acuerdo definitivo, se enviará la copia final de la declaración de la solicitud de consentimiento conjunto/folleto informativo a los accionistas de T-Mobile y Sprint. Los inversionistas y titulares de valores podrán obtener la declaración de inscripción y la declaración de solicitud de consentimiento conjunto/folleto informativo sin cargo en el sitio web de la SEC o de T-Mobile o Sprint. The documents filed by T-Mobile with the SEC may be obtained free of charge at T-Mobile's website, at www.t-mobile.com, or at the SEC's website, at www.sec.gov. These documents may also be obtained free of charge from T-Mobile by requesting them by mail at T-Mobile US, Inc., Investor Relations, 1 Park Avenue, 14th Floor, New York, NY 10016, or by telephone at 212-358-3210. The documents filed by Sprint with the SEC may be obtained free of charge at Sprint's website, at www.sprint.com, or at the SEC's website, at www.sec.gov. These documents may also be obtained free of charge from Sprint by requesting them by mail at Sprint Corporation, Shareholder Relations, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B679, Overland Park, Kansas 66251, or by telephone at 913-794-1091.
Quiénes realizan la solicitud
T-Mobile y Sprint y sus respectivos directores, ejecutivos y otros miembros de la administración y empleados pueden considerarse participantes en la solicitud de consentimiento en relación con la transacción propuesta. La información sobre los directores y ejecutivos de T-Mobile está disponible en la declaración de representación de T-Mobile del 26 de abril de 2018, para su Asamblea anual de accionistas de 2018. La información sobre los directores y ejecutivos de Sprint está disponible en el informe para los accionistas de Sprint del 26 de junio de 2018, para su Asamblea anual de accionistas de 2018, y en los informes subsiguientes de Sprint en el formulario 8-K presentado ante la SEC el 2 de julio de 2018. Otra información relacionada con los participantes en la solicitud del consentimiento y una descripción de sus intereses directos e indirectos, por tenencia de valores o de otro tipo, estarán incluidas en la declaración de solicitud de consentimiento conjunto/folleto informativo y otros materiales relevantes que se deberán presentar ante la SEC en relación con la adquisición, cuando estén disponibles. Los inversionistas deben leer detenidamente la declaración de solicitud de consentimiento conjunto/folleto informativo cuando esté disponible antes de emitir un voto o de tomar decisiones de inversión. Se pueden obtener copias sin cargo de estos documentos en T-Mobile o Sprint según se indica arriba.
No es oferta ni propuesta comercial
Esta comunicación no constituye una oferta para vender ni una propuesta comercial de una oferta de compra de valores, ni habrá venta de valores en ninguna jurisdicción en la que dicha oferta, propuesta comercial o venta se considere ilegal con anterioridad a la inscripción o calificación, conforme a la legislación sobre valores vigente en dicha jurisdicción. No se podrán ofrecer valores, excepto por medio de un prospecto que cumpla con los requisitos de la sección 10 de la Ley de Valores de EE.UU. de 1933, y sus posteriores enmiendas.
Advertencia en relación con las declaraciones a futuro
Esta comunicación contiene ciertas declaraciones a futuro con respecto a T-Mobile, Sprint y la transacción propuesta entre T-Mobile y Sprint. Todas las declaraciones que no sean declaraciones de hecho, incluida la información sobre resultados futuros, son declaraciones a futuro. Estas declaraciones a futuro generalmente se identifican mediante las palabras “anticipar”, “creer”, “estimar”, “suponer”, “pretender”, “puede”, “podría” o expresiones similares. Dichas declaraciones a futuro incluyen, entre otras, declaraciones sobre los beneficios de la transacción propuesta, incluidos futuros resultados financieros y operativos previstos, sinergias, tasas de aumento y crecimiento, los planes, objetivos, expectativas e intenciones de T-Mobile, de Sprint y de la compañía combinada, y el plazo previsto para completar la transacción propuesta. Existen varios factores que podrían ocasionar que los planes y resultados reales difieran de manera sustancial de los expresados o implícitos en las declaraciones a futuro. Such factors include, but are not limited to, the failure to obtain, or delays in obtaining, required regulatory approvals, and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction, or the failure to satisfy any of the other conditions to the proposed transaction on a timely basis or at all; the occurrence of events that may give rise to a right of one or both of the parties to terminate the business combination agreement; adverse effects on the market price of T-Mobile's or Sprint's common stock and on T-Mobile's or Sprint's operating results because of a failure to complete the proposed transaction in the anticipated timeframe or at all; inability to obtain the financing contemplated to be obtained in connection with the proposed transaction on the expected terms or timing or at all; the ability of T-Mobile, Sprint and the combined company to make payments on debt or to repay existing or future indebtedness when due or to comply with the covenants contained therein; adverse changes in the ratings of T-Mobile's or Sprint's debt securities or adverse conditions in the credit markets; negative effects of the announcement, pendency or consummation of the transaction on the market price of T-Mobile's or Sprint's common stock and on T-Mobile's or Sprint's operating results, including as a result of changes in key customer, supplier, employee or other business relationships; significant transaction costs, including financing costs, and unknown liabilities; failure to realize the expected benefits and synergies of the proposed transaction in the expected timeframes or at all; costs or difficulties related to the integration of Sprint's network and operations into T-Mobile; the risk of litigation or regulatory actions; the inability of T-Mobile, Sprint or the combined company to retain and hire key personnel; the risk that certain contractual restrictions contained in the business combination agreement during the pendency of the proposed transaction could adversely affect T-Mobile's or Sprint's ability to pursue business opportunities or strategic transactions; effects of changes in the regulatory environment in which T-Mobile and Sprint operate; changes in global, political, economic, business, competitive and market conditions; changes in tax and other laws and regulations; and other risks and uncertainties detailed in T-Mobile's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in its subsequent reports on Form 10-Q, including in the sections thereof captioned "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements," as well as in its subsequent reports on Form 8-K, all of which are filed with the SEC and available at www.sec.gov and www.t-mobile.com, and in Sprint's Annual Report on Form 10-K for the fiscal year ended March 31, 2017 and in its subsequent reports on Form 10-Q, including in the sections thereof captioned "Risk Factors" and "MD&A - Forward-Looking Statements," as well as in its subsequent reports on Form 8-K, all of which are filed with the SEC and available at www.sec.gov and www.sprint.com. Las declaraciones a futuro se basan en expectativas y suposiciones actuales, que están sujetas a riesgos e incertidumbres que pueden ocasionar que los resultados reales sean sustancialmente diferentes de los expresados o implícitos en dichas declaraciones a futuro. En virtud de estos riesgos e incertidumbres, se exhorta a los lectores de esta comunicación a no basarse indebidamente en dichas declaraciones a futuro. T-Mobile y Sprint no asumen ningún tipo de obligación de actualizar o modificar la información contenida en esta comunicación (ya sea como resultado de la nueva información, acontecimientos futuros o algún otro factor), a menos que así lo exija la legislación vigente.