MetroPCS Communications Inc. (PCS) shareholders approved a sweetened deal to merge the company with Deutsche Telekom AG (DTE)’s T-Mobile USA unit, the country’s fourth- biggest wireless provider.
Investors of Richardson, Texas-based MetroPCS voted in favor of the transaction at a shareholder meeting today, a company spokesman said.
Deutsche Telekom on April 10 bowed to shareholder pressure, agreeing to lower the size and interest rate of a loan to the joint company and triggering a delay in the vote, which had been scheduled for April 12. The transaction adds more than 9 million prepaid customers to T-Mobile USA, as well as wireless spectrum needed to provide faster data services to compete with Verizon Wireless and AT&T Inc. (T)
The improved terms, which cut the shareholder loan to $11.2 billion from $15 billion and trim theinterest rate by half a percentage point, won the endorsement of MetroPCS’s largest investor, Paulson & Co., as well two shareholder-advisory firms in the run-up to the vote.
The deal gives Deutsche Telekom a 74 percent stake in the merged entity and MetroPCS shareholders a $1.5 billion cash payment. The enlarged T-Mobile USA will be exchange-listed and Deutsche Telekom will be barred from selling shares on the market for 18 months.
Deutsche Telekom rose 1.8 percent to 8.98 euros at 3:54 p.m. in Frankfurt. MetroPCS slipped 0.9 percent to $11.59 in New York trading.
The pace of consolidation in the U.S. is picking up. Dish Network Corp. last week offered $25.5 billion for Sprint Nextel Corp., the nation’s third-biggest mobile-phone carrier, beating terms offered by Japan’s Softbank Corp. in October.
For Deutsche Telekom Chief Executive Officer Rene Obermann, the shareholder approval brings into reach a successful conclusion of years of travel and negotiations to find a solution for the company’s U.S. business. It also lifts Deutsche Telekom’s chances of exiting the U.S. in the medium term, after a $39 billion sale to AT&T collapsed in 2011 because of opposition by regulators.
T-Mobile lost 13 percent of its contract customers between 2009 and 2012 as it lagged behind peers in constructing faster networks and offering Apple Inc.’s iPhone. The company began offering the device this month and has scrapped long-term contracts in an effort to win back customers.