FILE PHOTO: A T-Mobile employee assists a customer as pre-Thanksgiving and Christmas holiday shopping accelerates at the King of Prussia Mall in King of Prussia, Pennsylvania, U.S. November 22, 2019. REUTERS/Mark Makela
BERLIN (Reuters) – Deutsche Telekom (DTEGn.DE) is in talks to buy out shares in its U.S. unit T-Mobile (TMUS.O) from Japan’s Softbank (9984.T), CEO Tim Hoettges said on Friday, noting that under a shareholder agreement it has the right of first refusal.
Hoettges, answering a question at Deutsche Telekom’s annual general meeting, said Softbank was seeking to sell down its stake due to “heightened liquidity needs arising from the demanding economic environment”.
He noted that, under a four-year shareholder agreement that entered effect when T-Mobile completed its acquisition of Sprint, Deutsche Telekom had the pre-emptive purchase right to ensure it retains control of its U.S. subsidiary.
Deutsche Telekom owns 43% of T-Mobile but is able to vote shares owned by Softbank. That brings its voting stake to 67%, assuring strategic control and allowing it to consolidate the financial results of the U.S. unit.
No agreement has yet been reached and Deutsche Telekom will inform the market when one has been reached, Hoettges said.
Reporting by Douglas Busvine; editing by Thomas Seythal