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

 Shares in Deutsche Telekom rose on Thursday and T-Mobile U.S. closed up 2.8% at $187.30 on Wednesday, after Bloomberg reported that activist investor Elliott Investment Management had built a sizeable stake in the German telecoms group and was pressing it to abandon a potential full merger of the two companies in favour of larger share buybacks.

Analysts said the move reflected investor appetite for a resolution to the long-running merger overhang between the two companies. 

J.P. Morgan analyst Akhil Dattani said in a note that the mere speculation of activist involvement was enough to move the stock, calling Deutsche Telekom "extremely cheap" relative to its double-digit earnings-per-share growth algorithm, weighed down by what he called "a unique cocktail of strategic overhangs."

"Activism could force DT to address this debate, either through admitting their merger interest and in turn outlining the deal logic, or by formally ruling out a transaction," Dattani said, rating the stock “overweight.”

Dattani noted Deutsche Telekom has already committed to buy back up to €5 billion ($5.8 billion), or roughly 4% of its shares, this year. Increasing that programme would be financially accretive but would not on its own resolve the strategic concerns weighing on sentiment, he said. 

A full re-rating, he added, would likely require the company to either walk away from, or fully justify, the T-Mobile deal and address a separate set of U.S.-related concerns, including satellite competition, wireless competitive dynamics, a perceived weak fibre footprint and a heavy slate of spectrum auctions.

Elliott’s move sets it against Deutsche Telekom chief executive Tim Hoettges, who has pursued a full combination with T-Mobile US since at least April 2026. 

Deutsche Telekom holds roughly a 53% stake in T-Mobile US, and a full merger would have created the world’s largest wireless operator by market value.

Deutsche Telekom shares have fallen roughly 9% in Frankfurt over the past 12 months, giving the company a market value of about €138 billion ($160 billion), Bloomberg reported.

Elliott’s stake size has not been disclosed. Under German securities rules, investors must disclose a position once it reaches or exceeds 3% of a company’s shares, meaning a regulatory filing could offer the first public confirmation of the size of Elliott’s holding.

The report follows a Semafor story in late July that said T-Mobile US executives had told Deutsche Telekom they no longer supported the roughly $300 billion merger, citing shareholder concerns and regulatory risk. 

U.S. regulators were widely expected to require that T-Mobile revenue remain invested domestically as a condition of any deal, a constraint that would have complicated the strategic rationale for the tie-up.