French telecom Iliad making a surprise $15B bid for control of T-Mobile US

Update: Iliad has confirmed with a press release that it is indeed making the bid for T-Mobile, and has submitted the offer to T-Mo's Board of Directors. Iliad's owners and Board of Directors have unanimously approved the deal, which would see Iliad paying $15 billion in cash for 56.6 percent of T-Mobile, valuing it at $36.20 per share, a 42 percent premium over its current stock price.

In a bid that's come way out of left field, French telecommunications firm Iliad SA is also offering to buy a controlling stake in T-Mobile US. T-Mobile, itself a subsidiary of T-Mobile Germany, has been engaged in long-running negotiations with US rival Sprint. The $15 billion bid from Iliad comes as a surprise, not just for their previously unexpressed interest, but that Iliad is a smaller company that T-Mobile in both terms of subscribers and value.

Iliad's carrier subsidiary Free Mobile has a little over 7 million subscribers, while T-Mobile just crossed 50 million. Iliad as a company is valued at $16 billion (€12 billion), while T-Mobile US has a market capitalization of $24.8 billion. Iliad has apparently offered T-Mobile "about $33 a share" for the company... less than a 6% premium on the trading price of TMUS before the revelation of the proposal. Regardless of how much Iliad offers for a takeover of T-Mobile, but they'd be looking at taking on an enormous debt load.

Iliad's Free Mobile has only been around since 2012, and has captured more than 12% of the French cellular subscriber market. They've been incredibly aggressive with their pricing, offering plans for a little as €2 ($2.68) a month.

But there's a bit of a kindred spirit between T-Mobile US and Free Mobile. Both have pushed to simplify the mobile phone process in eliminating (or avoiding from the start) subsidies on phones and dumping formal contract plans.

Source: The Wall Street Journal, Bloomberg, Iliad

Derek Kessler

Derek Kessler is Special Projects Manager for Mobile Nations. He's been writing about tech since 2009, has far more phones than is considered humane, still carries a torch for Palm, and got a Tesla because it was the biggest gadget he could find. You can follow him on Twitter at @derekakessler.

  • Ooooh
  • WOoooh
  • Better them than sprint
  • IDK the French are a bunch of wussies. Always have been. Posted via Windows Phone Central App
  • Sounds good but why dosent Tmus should buy themselves out?
  • Curious, why do these things never come out of right field? :D
  • Usually the weakest outfielder plays in left, so seeing him doing something weighs be a surprise
  • Huh. TIL.
  • I'm pretty sure that it is the right fielder that's the weakest. The reason being that most people are right handed and are gonna pull it to the left, unless they are late on the swing, then they hit towards right. Or if they are left handed then they normally swing towards right. Most hits to the outfield are center or left.
  • Thanks, didnt know there was an actual real world inspiration for the phrase.
  • Hmmm. The Iliad didn't end well if I remember correctly
  • Depends: not well for the Trojans, well for the Greeks...
  • I'd prefer this to a Sprint merger.
  • Iliad has already drastically reduced other carriers' profits here in France so I guess if they bought T-Mobile USA it would be a good thing for American mobile subscribers and for the French economy.
  • How would this effect the French economy? Tmo offers service in the U.S. There's noway they'd move any call centers to France. The labor law is insane. You literally can't fire sorry workers. Unions have got France screwed. Posted via Windows Phone Central App
  • "IDK the French are a bunch of wussies. Always have been. " "The labor law is insane. You literally can't fire sorry workers. Unions have got France screwed." You don't know what you're talking about, you idiot redneck
  • Iliad is relatively new in mobile but it's been there since the nineties and it was the first to offer triple play in France, prices went down here because of them so now you pay around 30€ for triple play ADSL access at home and 15€ for 3Go data plus illimited texts and voice on mobile... If they have the same prices in the USA they will be successfull very quickly, i hope that deal will be possible for all my american friends who pay incredibly high fees on their data plans on mobile and at home
  • With free, you can get 20go of data, and unlimited text/call for 19€. This would be incredebly good for the American consumers, and for the French economy.
  • That's a big achievement for a company that started just couple of years back.
  • actually Iliad, with "Free", their brand, dates back to 1995... kinda old in the technology market :p
  • Can these other companies just leave T-Mobile be and stop trying to buy them out? T-Mobile is obviously doing very well on its own, so they don't need any 'help.'
  • I heard that tmobile Germany was trying to sell off the US part so they can expand into Europe, and that's where all these bids come from. To me Iliad buying T-Mobile USA makes a lot more sense than sprint who uses cdma and is a crappy carrier buying them.
  • Thing is, current speculation and rumor suggests that Sprint would move customers over to T-mobile, after which Sprint's infrastructure and technology would be reworked for TMobile, at which point Sprint would be "No More". In such a scenario, it would be beneficial for TMobile, because they'd essentially walk out of the deal with more towers and a larger customer base, not to mention more funds to work with. Tmobile's biggest issue hindering consumer utilization of their network is coverage, so to be able to use any towers from another carrier would be a big help, even if they're Sprint's.
  • Nice scenario but nothing more than rumor/speculation/wishful thinking.
  • That's not how they handled the Nextel disaster. Posted via Windows Phone Central App
  • I'm pretty sure T-Mobile doesn't want to be left alone. I've long been thinking that T-Mobile is doing all these industry shake ups so they can attract customers and then sell off to another company. I mean come on, free music streaming? That can't be a profitable service.
  • If they succeed, expect to pay between 16 to 20 bucks a month (possibly less) for a plan with unlimited calls plus sms and 3Gb of data, possibly free calls from specific countries abroad...
    On the cable side, it also means a cable modem that will double down as a set top box with added services that will come free with your subscriptions (Free/Illiad is the company that first introduced this).
    That's the kind of things that appeared in France with Illiad/Free.
  • Sounds like a heck of deal to me!
  • It's already $25 a month if you have 4 lines. Posted via Windows Phone Central App
  • Sweet but T-Mobile don't have cable TV or cable internet lol
  • Moi je suis abonné à Free et j'avoue c'est très bizarre ça !
  • Better than Sprint.
  • Buy sprint!!
  • Whatever keeps it out of the toilets of Sprint is fine with me.
  • I'm on the $30 prepaid plan, I have a feeling sprint would rid me of this so ef that noise