The technology, media and telecommunications sector has been responsible for the world’s largest public M&A deals and could be on track to set a new record.
A Bloomberg reported on Tuesday that Deutsche Telekom and its American subsidiary T-Mobile US are discussing the creation of a new holding company that would make an all-stock offering to acquire stakes in both operators.
Such a transaction would bring together companies with a combined market value of around US$380 billion under a single structure — creating a resulting entity with greater size and potential to make acquisitions.
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This would result in the largest public M&A deal in history, according to data compiled by Bloomberg. It would surpass Time Warner Inc.’s mammoth acquisition of America Online Inc., worth about $186 billion including debt, and Vodafone AirTouch Plc’s purchase of Mannesmann AG for a similar amount—both completed around the turn of the millennium.
Still, a merger between Deutsche Telekom and T-Mobile would likely face several hurdles, with the companies possibly having to make significant commitments to their respective home markets. The German government, which owns a stake in Deutsche Telekom, would also need to support any deal.
