Elliott Takes Deutsche Telekom Stake, Opposes $300B T-Mobile Deal

Of the €23.3 billion in adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — that Deutsche Telekom reported for the first half of 2026, €15.7 billion came not from Germany but from America. The business producing two-thirds of the group's profit is T-Mobile US. Deutsche Telekom's stake in it is 54.3%.

The gap between those two numbers is the question that has occupied the German operator for five months: is owning a little more than half of a business enough when that business generates two-thirds of your profit?

Chief executive Tim Höttges has been answering no since April. On the evening of September 2, Bloomberg reported that a new shareholder disagrees. Activist investor Elliott Investment Management has built a position in Deutsche Telekom and wants the company to drop the full buyout and expand its share repurchases instead.

How large Elliott's holding is remains unknown. German securities law triggers a disclosure duty at 3% of voting rights, and no filing has been made; the fund's known method is to build below that line and then go public. Neither Elliott nor Deutsche Telekom has confirmed the report.

A Plan That Started in April and Stopped in July

The idea surfaced in April 2026, when Bloomberg reported that Deutsche Telekom was weighing a full combination with T-Mobile US — a structure that would have created the world's largest wireless operator by market capitalization. The transaction was discussed at roughly $300 billion.

It stalled at the end of July. According to Semafor's July 31 report, T-Mobile's American executives told Deutsche Telekom they no longer supported the merger, for two reasons. First, they were not confident that minority holders would approve it: large institutional investors in T-Mobile were unenthusiastic about swapping into a slower-growing European parent. Second, the regulators.

The regulatory obstacle was CFIUS, the body that reviews foreign investment in the United States. Semafor reported that any approval would likely come with a requirement that revenue T-Mobile earns in America be "reinvested in or otherwise remain in the country." Why that condition mattered so much becomes clear below: it aims directly at the only real prize in the deal.

At his August 6 results briefing Höttges did not address the merger reports directly, but he set a test: "Wir werden keine Transaktion wegen ihrer Größe, ihrer Schlagzeile oder ihrer strategischen Eleganz tätigen" — no transaction will be done for its size, its headline or its strategic elegance. That same day the company raised its buyback program by €3 billion to €5 billion. A smaller version of what Elliott now wants, in other words, was already policy a month ago.

A Preference, Not an Instrument

The headline reads that Elliott opposes a $300 billion merger. It is worth separating what sits underneath it.

What was actually said? Publicly, nothing. Elliott has issued no statement and Deutsche Telekom has confirmed none. What exists is a Bloomberg report sourced to people familiar with the matter, conveying a preference: buybacks rather than a merger. A preference is not a demand, and a demand is not a binding act.

Is there an instrument that makes the preference binding? There is not. No filed stake, no board seat, no motion on a shareholder meeting agenda. At a German public company, 3% is merely the point at which a holder becomes visible; the right to call an extraordinary general meeting begins at 5%, and decisions touching the articles of association require far more.

Do the existing instruments cover this event? The interesting part is that the tools capable of stopping the merger belong to others. The vote of T-Mobile's non-controlling shareholders is a real gate, and it closed in July. A CFIUS condition is a real constraint. What Elliott is doing is pushing on a door that is already jammed, and moving the argument to the next question: if the money does not go into a merger, where does it go?

The Arithmetic of Consolidation

Here is the core of it. Own 54.3% of a company and accounting rules have you fully consolidate it: all of its revenue and all of its EBITDA land in your statements. The €15.7 billion of T-Mobile EBITDA that Deutsche Telekom reported for the first half is the whole business, not its share of it.

Which means buying the remaining 45.7% would change group revenue and group EBITDA not at all. The only line that moves is the minority-interest deduction below net profit — the slice that currently belongs to American shareholders. A purchase of more than $90 billion buys a subtraction at the bottom of the income statement, not growth at the top.

Pricing that line is not difficult.

That is Elliott's arithmetic in full. The company's own stock sells profit more cheaply than a minority stake in a business it does not control. On the valuation logic: What Is Valuation?

Then there is funding. Deutsche Telekom's net debt stands at 2.68 times EBITDA including leases, against a self-imposed ceiling of 2.75. The headroom is 0.07 turns. There is no way to fit a purchase north of $90 billion into that space.

The Real Prize Was Cash, and That Is Where the Obstacle Sat

Was there no case for the merger at all? There was, but it lived in cash rather than in profit.

Deutsche Telekom reports all of T-Mobile's EBITDA today, yet the money itself can only reach it as a dividend. On the figures Semafor cited, T-Mobile generated roughly $18 billion of adjusted free cash flow last year and paid Deutsche Telekom more than $2 billion in dividends. Eighteen in the statements, two in the account.

Full ownership would have closed that gap: the entire cash flow would become usable inside the group without a dividend decision. On why free cash flow is read separately from profit: What Is Cash Flow?

The CFIUS signal landed exactly there. A requirement that American revenue stay in America, or be reinvested there, would fence off the one thing the merger was buying — the free movement of cash across the border. What remained would be a minority slice yielding 4% to 5%, to be bought without the balance-sheet capacity to buy it.

The Free Route: T-Mobile's Own Buybacks

Deutsche Telekom already has another path to full ownership, and it has been working for years.

Every share T-Mobile repurchases and cancels shrinks the share count. Deutsche Telekom's holding stays the same in absolute terms, but it is divided by a smaller denominator, so the percentage rises on its own. The stake that fell to 43% in 2020 after the Sprint merger and SoftBank's entry climbed to 50.2% by April 2023 on the back of the buyback program T-Mobile launched in 2022. Today it is 54.3%.

The mechanics are simple: if T-Mobile retires 5% of its shares, a holder of 54.3% arrives at 54.3/95, or 57.2%. Without paying anything. That is precisely the route from 43% to 54.3% over eleven years.

The Other Side: The Largest Shareholder Is the German State

The structure Elliott faces at Deutsche Telekom is not a typical activist target.

The German state and the KfW development bank together hold more than 28% of the shares — on its own a decisive bloc in any argument that reaches a vote. It is one reason Elliott's campaign runs through the press: it cannot buy its way past the largest holder on the register.

What the Market Said

The shares opened 1.5% higher in Frankfurt on the morning of September 3 and led the DAX; in pre-market trading on Tradegate the gain had reached 2%. T-Mobile stock closed the previous session in New York up 2.09% at $185.97, though the broader market was higher that day too — not a move to pin on a single headline.

The information is in how small the move was. News that a shareholder capable of obstructing a $300 billion transaction has appeared moves the stock 1.5%. The most reasonable reading: the market was not pricing the merger in the first place. Semafor's report at the end of July had already removed it from expectations, and Elliott's news added no new possibility — it confirmed an existing one.

The distance between the two charts says something else. T-Mobile trades roughly 28% below its 52-week high of $256.69. Deutsche Telekom shares are down somewhere between 7% and 9% over twelve months. The condition behind Elliott's argument that the company should be buying its own stock is that both sides have grown cheaper.

What Is Left

There is no registered stake, no published demand, no motion to vote on. What happened is that a closed door was knocked on once more, and the question of where the capital goes was reopened.

There are concrete things to watch. If Elliott's holding crosses 3%, German law requires a filing, and the size of the position becomes visible that day. The pace at which the remainder of the €5 billion buyback is executed will show which way the company is leaning. And if T-Mobile keeps retiring its own shares, Deutsche Telekom's stake will keep growing without anyone paying for it.

This article draws on Bloomberg's September 2 report and the Reuters and dpa-AFX write-ups that carried it, Semafor's July 31 report, Deutsche Telekom's first-half 2026 results presentation, and price and market-capitalization records from market data providers. The size of Elliott's stake has not been publicly disclosed; claims about it rest on press reporting sourced to unnamed people. The earnings-yield figures are approximations calculated from published numbers.