Legal Business

MoFo and Wachtell lead on T-Mobile’s $26bn ‘seismic shift’ buyout of Sprint

Wachtell, Lipton, Rosen & Katz and Morrison & Foerster have taken the lead on T-Mobile’s takeover of fellow US telecoms operator Sprint, billed as an attempt to make the US a hotbed for innovation.

The proposed $146bn combination sees Washington-headquartered T-Mobile enter into an all-stock deal to merge with Sprint. The transaction gives the Kansas-based target an enterprise value of $59bn and paves the way for the companies’ dual ambition to build the world’s best 5G network.

The combined company will be named T-Mobile and is expected to have the network capacity to rapidly create a nationwide 5G network while having lower costs and greater economies of scale.

Wachtell’s team, led by New York corporate partner Adam Emmerich, is advising T-Mobile and its German parent company Deutsche Telekom. MoFo, meanwhile, is acting for Sprint and its controlling shareholder SoftBank Group with a team led by global M&A practice group co-chair Robert Townsend (San Francisco), corporate partners Brandon Parris (San Francisco) and David Slotkin (Washington DC), antitrust partners David Meyer (Washington DC) and Jeff Jaeckel (Washington DC), regulatory partner Nick Spiliotes (Washington DC), tax partner Bernie Pistillo (San Francisco) and Tokyo office managing partner Ken Siegel.

The team also includes corporate partners Mike O’Bryan (San Francisco) and Scott Lesmes (Washington DC), finance partner Mark Wojciechowski (New York), corporate partner Ivan Smallwood (Tokyo), antitrust partner Mike Miller (New York), technology transactions partner Paul Jahn (San Francisco) and compensation benefits partner Domnick Bozzetti (New York).

Cleary Gottlieb and DLA Piper are acting as regulatory counsel to T-Mobile and Deutsche Telekom. Cleary’s team was led by Washington DC partners Mark Nelson, George Cary, and Jeremy Calsyn, as well as Dan Culley in Brussels. Weil is advising Evercore, the financial adviser to T-Mobile’s committee of independent directors, with a team led by New York corporate partner Michael Aiello and including M&A partner Eoghan Keenan.

Latham & Watkins is advising the committee of independent directors, with a corporate team including partners Charles Ruck in New York and Orange County and Daniel Rees in Orange County. Advising on finance matters are partners Keith Halverstam and Benjamin Cohen in New York and Greg Robins in Los Angeles, while James Barker and Matthew Brill in Washington DC are acting on communications matters.

Steven Croley in Washington DC advised on the Committee on Foreign in the United States (CFIUS) matters, Michael Egge on antitrust and Michele Johnson on compliance. Richards, Layton & Finger served as Delaware counsel to the committee of independent directors of T-Mobile.

Goodwin Procter is legal counsel to the independent transaction committee of the board of directors of Sprint while Skadden, Arps, Slate, Meagher & Flom is regulatory co-counsel and Potter Anderson Corroon is Delaware counsel.

Morgan Stanley is financial adviser to Deutsche Telekom, while Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, and RBC are providing T-Mobile with committed debt financing to support the transaction. PJT Partners is advising T-Mobile on the debt financing associated with the transaction.

After the deal closes – likely between Q4 2018 and Q2 2019 – the new company will be headquartered in Bellevue, Washington with a second headquarters in Overland Park, Kansas.

‘This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience – and do it all so much faster than either company could on its own’, said John Legere, president and chief executive officer of T-Mobile US, who will also head the new company.

He added: ‘As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf.’

Sprint chief executive Marcelo Claure commented: ‘Sprint and T-Mobile have similar DNA and have eliminated confusing rate plans, converging into one rate plan: Unlimited. We intend to bring this same competitive disruption as we look to build the world’s best 5G network that will make the US a hotbed for innovation. Going from 4G to 5G is like going from black and white to colour TV – it’s a seismic shift – one that only the combined company can unlock nationwide to fuel the next wave of mobile innovation.’

nathalie.tidman@legalease.co.uk