Last year, AT&T attempted to purchase T-Mobile for an approximate $39 billion, leaving only three major cell phone carriers available in the market. Though the Federal Communications Commission and Department of Justice ultimately shot down AT&T's bid, it left many to wonder what the future for T-Mobile was going to be.
With competition edging the cell phone provider out from all sides and with customer satisfaction dwindling it seemed inevitable that the government was going to have to allow some form of a merger at some point.
Finally, this month, both T-Mobile and MetroPCS announced that they were merging to create "the leading value carrier in the U.S. wireless marketplace." The deal is structured as a recapitalization in which MetroPCS will declare a 1 for 2 reverse stock split, which will pay out some $1.5 billion to its shareholders.
According to the contract between the two companies, the new company will keep the T-Mobile name and continue trading on the stock exchange. T-Mobile's CEO will also keep his titled for the new combined company.
Many people point out that this was finally a business transaction that the Federal Communications Commission could not stop. According to some, it neither corners the market, nor does it constitute as a buyout, which two of the major issues with AT&T's bid for the company last year.
MetroPCS's chairman says, "Ultimately, this combination will create a stronger wireless provider nationally with broader value offerings to better serve our combined customers and drive shareholders value."
Source: ZDnet.com, "T-Mobile, MetroPCS to merge in $1.5bn deal," Andrew Nusca, Oct. 3, 2012