NEW YORK – Deutsche Telekom is considering a full combination with its American arm T-Mobile US, a move that would create a multinational telecom group and rank as the largest-ever public mergers and acquisitions (M&A) deal, people with knowledge of the matter said.
Deutsche Telekom is already T-Mobile’s biggest shareholder with a roughly 53 per cent stake. The German carrier has been discussing the idea of creating a new holding company that would make a stock bid for shares of both Deutsche Telekom and T-Mobile, the people said.
Combining the two companies would create the world’s biggest wireless operator by market capitalisation, surpassing China Mobile, which is valued at about US$235 billion (S$299 billion).
The combined entity may then seek a listing in the United States and a major European exchange, though the details are still being worked out, some of the people said.
Discussions are at a preliminary stage and any transaction would require political support to move ahead, the people said. Details of the possible deal could also change.
Any transaction may face significant obstacles, including the need for political support in Berlin and Washington. The German government and state-owned lender KfW own a combined stake of about 28 per cent in Deutsche Telekom, giving them major sway in any deal.
In order to win approval, the companies may need to consider commitments to keep a major base in Germany and make significant investments in the US, some of the people said.
In a February podcast, Deutsche Telekom chief executive officer Tim Hoettges warned that European regulation is a major hurdle that’s preventing progress in building the continent’s digital infrastructure. He said that while Deutsche Telekom has become a global heavyweight, its market value is almost exclusively driven by its US business, highlighting the struggles of the European market.
The potential move also comes at a time of increasing tension between US President Donald Trump and European leaders like German Chancellor Friedrich Merz, who have been at loggerheads on issues from tariffs to the NATO alliance.
The European Union is working on new merger guidelines that would potentially ease the pathway for creating European champions big enough to compete with US and Chinese rivals. At the same time, many European companies have been looking at US acquisitions to tap the faster growth in that market.
Deutsche Telekom has been laying the groundwork for years to wield even more control over T-Mobile. Former Deutsche Telekom executive Srini Gopalan took over as chief executive officer of T-Mobile in November. Mr Gopalan had been CEO of Deutsche Telekom Germany before joining T-Mobile as chief operating officer in March 2025. BLOOMBERG
