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Deutsche Telekom and MetroPCS Announce Merger

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Top message:  From my understanding. by johnhr2   Oct 3, 2012, 9:53 AM

Replying to:  Re: From my understanding. by T Bone   Oct 3, 2012, 9:56 AM

Re: From my understanding.

by carmodboy99    Oct 3, 2012, 11:12 AM

lol I guess I could see that take on it. Essentially MetroPCS is purchasing TMO with shares, and no cash. TMO isn't worth 74% of Metro, so DT is adding $2 billion to the deal ($1.5b up front, $500 mil over time) to balance it out. I imagine this is or some variation of it was what had the deal falling apart all week. Additionally, DT doesn't even want to own any of this new entity, and part of the merger agreement provides that DT will be selling their 74% little by little over time, vs having to sell all of it at once (thus the term reverse merger... Think of it as purchasing a "rent while you buy" house) Ultimately whether its shares are purchased back by Metro or the public/other corporations, DT in the end will go away, if not completely then in large part.

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