KUALA LUMPUR, Sept 7 -- SoftBank Group Corp (SoftBank) announced it has entered into a strategic partnership and equity share swap agreement with Deutsche Telekom AG (DT).
“The long-term strategic partnership will create incredible opportunities for our portfolio companies to turbocharge their growth with access to approximately 300 million customers across Japan, Europe and the US in total,” said Corporate Officer, Executive Vice President & Chief Operating Officer of SoftBank Group Corp and Chief Executive Officer of SoftBank Group International, Marcelo Claure.
Under the strategic partnership between the two companies, SoftBank’s more than 300 portfolio companies gain access to an additional, approximately 240 million DT customers across Europe and the US, providing these portfolio companies the ability to scale quickly and at a low cost.
According to a statement, DT will benefit from ARPU increase, churn reduction and JV participation.
Under the equity share swap agreement, DT will exercise a portion of its call options that were granted by SoftBank in connection with their June 2020 agreement. DT will acquire approximately 45 million T-Mobile US (TMUS) shares from SoftBank in exchange for issuing 225 million new DT shares to SoftBank from its authorised capital.
In a subsequent step, DT envisages exercising call options to acquire another approximately 20 million TMUS shares from SoftBank by re-investing US$2.4 billion of expected disposal proceeds from the announced sale of T-Mobile Netherlands. (US$1 = RM4.144)
As a result of these transactions – the equity share swap and the re-investment of proceeds – SoftBank will become a 4.5 per cent shareholder in DT and retain a 3.3 per cent equity stake in TMUS, which could increase to 6.9 per cent through True-Up Shares, if TMUS stock price were to hit certain milestones.
SoftBank will be able to use DT and TMUS stock as collateral for financing and hedging purposes. Any such transaction would be consistent with the long-term strategic partnership, with SoftBank retaining significant exposure to DT and TMUS share price.
In connection with the agreement, DT’s management will support a proposal by SoftBank to have Claure elected to the Supervisory Board of DT at the next annual general meeting.
The transaction has been approved by the Board of Directors of SoftBank and the Supervisory Board of DT and is expected to close and become effective by incorporation in DT’s commercial register.
More details at https://global.softbank.
-- BERNAMA
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