Chip giant Advanced Micro Devices Inc. and a group led by Mexican telecommunications tycoon Carlos Slim will buy all or a substantial part of SoftBank Corp.’s stake in T-Mobile US Inc., valued at more than $33 billion, the two companies said in a statement.
Advanced Micro Devices and the team led by Slim’s investment vehicle will buy as much as 51 percent of the No. 4 U.S. mobile carrier’s shares from SoftBank, the Nikkei reported Friday. T-Mobile’s shareholders would receive 3.2 billion euros ($3.6 billion) for their stakes, the Nikkei reported.
T-Mobile and AT&T Inc. both planned to spin off mobile-service companies to shareholders on an announced basis this year in an effort to cut debt and streamline costs. T-Mobile, which traces its roots to a former post office, saw its shares jump 8.5 percent after the latest proposal. AT&T and Sprint Corp. are instead working on a deal, taking the fight to each other in the process.
In an email statement, SoftBank’s chief executive officer Masayoshi Son called the transaction a “brilliant business move for all parties involved.” Son said an agreement would “open T-Mobile’s doors to new cross-selling opportunities with Sprint and AT&T and the whole ecosystem through industry alliances.”
The Nikkei quoted the deal’s financial advisers, BMO Capital Markets and Kirkland & Ellis LLP, as saying that the provision could change the way T-Mobile is valued. Shares of SoftBank jumped as much as 6.5 percent, the biggest intraday gain since December 2015. Sprint also rose as much as 2.4 percent.
If the T-Mobile deal materializes, it would be only the latest in a series of big-ticket acquisitions by Son, who has already gone on to purchase video-game maker Activision Blizzard Inc. and wireless service operator Sprint Corp. AT&T and Sprint together hold a combined 59 percent of the wireless market.
T-Mobile still has 2.9 million customers, according to data from research firm FactSet. The company’s market value is just over $27 billion, less than its enterprise value.
The deal still needs the approval of the Justice Department, which has been stymied by complaints that the companies are unfairly trying to get too much market power. Sprint has been grappling with investors who demand complete restructuring.
Nomura Holdings Inc. raised its target price on Sprint by 40 percent to $31. It raised its target price on T-Mobile by 13 percent to $50.