T-Mobile US, Inc. (NASDAQ: TMUS) and Sprint Corporation (NYSE: S) have announced that they have entered into an amendment to their definitive Business Combination Agreement to create the New T-Mobile, the companies said.
The Boards of Directors of T-Mobile and Sprint have unanimously approved the amendment. The amendment has no impact on T-Mobile´s previously stated outlook on the New T-Mobile´s synergies, long-term profitability and cash generation.
A separate arrangement entered into by SoftBank Group Corp. in connection with the amendment will result in an effective exchange ratio of approximately 11.00 Sprint shares for each T-Mobile share immediately following the closing of the merger, an increase from the originally agreed 9.75 shares.
This is a result of SoftBank agreeing to surrender approximately 48.8 million T-Mobile shares acquired in the merger to New T-Mobile immediately following the closing of the transaction, making SoftBank´s effective ratio 11.31 Sprint shares per T-Mobile share. Sprint shareholders other than SoftBank will continue to receive the original fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share, or the equivalent of approximately 9.75 Sprint shares for each T-Mobile share.
Immediately following the closing, and after the surrender of shares by SoftBank, Deutsche Telekom and SoftBank are expected to hold approximately 43% and 24%, respectively, of the fully diluted New T-Mobile shares, with the remaining approximately 33% held by public shareholders.
T-Mobile has agreed to re-issue to SoftBank the previously surrendered shares upon the achievement of certain stock price milestones by New T-Mobile during a specified measurement period, and subject to certain additional terms, as outlined in the letter agreement that will be filed by each of T-Mobile and Sprint with the SEC.
In addition, the amendment extends the “outside date” under the Business Combination Agreement to July 1, 2020, and modifies certain other provisions of the Business Combination Agreement as described in the companies´ SEC filings.
The T-Mobile and Sprint combination remains subject to certain closing conditions. Additional information can be found at www.NewTMobile.com.