T-Mobile US executives have informed Deutsche Telekom that they no longer support a proposed $300 billion merger to fully combine the two companies. This reversal came after non-controlling shareholders, including large institutional investors, indicated they would vote against the transaction. T-Mobile's leadership concluded that the deal was unlikely to receive shareholder approval under these conditions. The merger talks began earlier in 2026, with Deutsche Telekom, which holds a 50% to 54% controlling stake, exploring a full takeover.
The shareholder opposition primarily stemmed from concerns that the deal undervalued T-Mobile's US operations. T-Mobile generated approximately $18 billion in adjusted free cash flow last year and paid over $2 billion in dividends to Deutsche Telekom. Institutional investors argued that fully integrating the company into its German parent would not adequately reflect the scale of its American business. Additionally, national security scrutiny from the Committee on Foreign Investment in the United States (CFIUS) was anticipated, with expectations that CFIUS would seek guarantees that US revenue would remain in the country, raising questions about capital movement.
The collapse of the merger talks led to a positive market reaction for Deutsche Telekom. On Monday, Deutsche Telekom shares jumped 3.61% to €27.82, making it one of the top performers on the DAX. Traders interpreted the news as a relief, as the $300 billion transaction carried significant integration risks. The proposed combination, which had been under discussion since earlier this year, ultimately faced decisive opposition from T-Mobile US minority investors, who also worried that a merger would dilute their exposure to the faster-growing American business. Despite the failed merger, Deutsche Telekom remains T-Mobile's largest shareholder, retaining its controlling position, dividend income, and board influence.
