By Debbie Cai
The Department of Justice has asked MetroPCS Communications Inc. (PCS) for more information in relation to its proposed reverse merger with Deutsche Telekom AG's (DTEGY, DTE.XE) U.S. subsidiary, T-Mobile USA.
MetroPCS said it will cooperate fully with the DoJ so the deal can be approved as soon as possible, and is confident the merger will be found procompetitive and proconsumer. It expects the transaction, which is subject to shareholder and regulatory approvals, to be completed in the first half of next year.
The information request will extend the waiting period under the HSR Act, an antitrust act, to 30 days after the companies comply.
Last month, MetroPCS agreed to the reverse merger, which means it will effectively its larger rival. Deutsche Telekom shareholders will own 74% of the combined company, while MetroPCS shareholders will own the rest and be paid $1.5 billion in cash.
MetroPCS's latest third-quarter earnings more than doubled as the prepaid wireless-service provider posted higher revenue and had a $53 million gain from a securities settlement.
The German telecommunications company earlier this month posted a hefty quarterly loss due to an impairment charge at T-Mobile USA, which continues to lose contract customers on a broad scale.
Shares of MetroPCS were down seven cents at $10.93 in after-hours trading. The stock is up 36% over the past 12 months.
Amerian depository shares of Deutsche Telekom closed Monday at $10.62 and were unchanged after hours. The stock is down 16% over the past 12 months.
Write to Debbie Cai at [email protected]
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