By Najat Kantouar
Shares in Germany's Deutsche Telekom fell after reports that the telecommunications giant was considering a potential combination with T-Mobile US, in which it already holds a majority stake.
In afternoon European trading, Deutsche Telekom shares were down around 4% at 27.66 euros. Over the past twelve months, shares have fallen nearly 14%.
The company is in talks over the creation of a new holding company that would make a stock bid for shares of both Deutsche Telekom and T-Mobile, according to media reports. The result would be a single group that controls both Deutsche Telekom's and T-Mobile's operations, which could then potentially seek to list in the U.S. and in Europe.
Deutsche Telekom is T-Mobile US biggest shareholder with an around 53% stake.
Chief Executive Timotheus Hoettges has repeatedly said he would like to own more, and could take advantage of the fact he chose not to take part in T-Mobile US's share buyback to raise its stake, but that approach is slow, Bank of America analysts wrote in a note to clients.
Deutsche Telekom's ability to materially increase its stake in T-Mobile US is unlikely to change any time soon, either due to leverage or the need to maintain TMUS liquidity, Bank of America analysts wrote in a note to clients. Also, "U.S. shareholders may prefer a cleaner US investment vs. a combination with Europe," they added.
For 2025, T-Mobile US service revenue--a key metric for the industry--increased 7.8% to $71.3 billion, while adjusted earnings before interest, tax, depreciation and amortization after leases rose 6.8% on year to $33.0 billion.
Write to Najat Kantouar at najat.kantouar@wsj.com
(END) Dow Jones Newswires
04-22-26 0918ET
