Deutsche Telekom AG shares surged the most since 2008 after the company agreed to sell its U.S. wireless unit to AT&T Inc. for $39 billion, a price that exceeded analyst expectations and allows it to slash debt.
Deutsche Telekom AG agreed to combine its T-Mobile USA unit with MetroPCS Communications Inc., doubling down on the U.S. wireless industry after a failed effort to sell the business to AT&T Inc. last year.
Two months ago, Deutsche Telekom AG ’s head of the U.S. told investors in New York that its wireless unit there was “ready to turn the business around” with the “best” fast Internet network to win back customers. Yesterday, it decided to sell instead.
Telefonica SA’s bid to combine its German phone unit with Royal KPN NV’s E-Plus will face a probe by European authorities concerned the carrier may gain too much wireless spectrum, people with knowledge of the matter said.
After spending the past year trying to salvage the doomed $39 billion sale of T-Mobile USA, parent Deutsche Telekom AG will increase network investments to make the wireless operator competitive again before a potential exit.
European stocks climbed the most in two months after a gauge of manufacturing in the euro area rose more than forecast and as investors awaited a Federal Reserve meeting starting tomorrow to gauge the timing of stimulus cuts.