Deutsche Telekom shares climb as Elliott targets T-Mobile merger plans

Deutsche Telekom's shares surged on Thursday, while T-Mobile U.S. experienced a 2.8% increase in value on Wednesday. According to Bloomberg, activist investor Elliott Investment Management had amassed a substantial stake in the German telecoms company and was urging it to forgo a potential full merger with T-Mobile U.S. in favor of larger share buybacks.

Analysts attributed the reaction to investor desire for an end to the protracted merger stalemate between the two entities. J.P. Morgan analyst Akhil Dattani asserted in a report that just the notion of activist involvement was sufficient to lift Deutsche Telekom's stock, describing the company as "extremely cheap" relative to its double-digit earnings-per-share growth, which was hampered by a complex blend of strategic obstacles.

Dattani posited that activism could compel DT to tackle this issue either by acknowledging its merger interest and explaining the deal rationale, or by formally rejecting the transaction. Dattani rated the stock as "overweight." DT has already pledged to repurchase up to €5 billion ($5.8 billion), or approximately 4% of its shares, this year.

Boosting that program would be financially beneficial but would not alone assuage the strategic concerns affecting sentiment, he added. A comprehensive re-rating, he suggested, would most likely necessitate either the company reneging on or fully justifying the T-Mobile deal and addressing separate U.S.-related matters, such as satellite competition, wireless competitive dynamics, a perceived weak fiber footprint, and an extensive spectrum auction schedule.

Elliott's move pitted itself against Deutsche Telekom's CEO, Tim Hoettges, who had been pressing for a complete combination with T-Mobile US since at least April 2026. Deutsche Telekom owns roughly a 53% share in T-Mobile US, and a full merger would have established the world's largest wireless operator by market value. Deutsche Telekom's share price has declined about 9% in Frankfurt over the past 12 months, yielding a company worth roughly €138 billion ($160 billion), as per Bloomberg.

The size of Elliott's stake was not disclosed. Under German securities regulations, investors must reveal a position once it reaches or exceeds 3% of a company's shares, meaning a regulatory filing could be the first public indication of the magnitude of Elliott's holding. The report followed a Semafor story in late July that T-Mobile US executives had informed Deutsche Telekom they no longer backed the roughly $300 billion merger due to shareholder concerns and regulatory risk.

U.S. regulators were expected to mandate that T-Mobile retain a majority of its revenue domestically as a condition of any deal, a condition that would have complicated the strategic logic for the partnership.