Deutsche Telekom has agreed a share-swap deal with Softbank that will give it greater control of T-Mobile US, while the Japanese firm will take a stake in DT.

The deal is part of a broader restructuring for the German incumbent, coming alongside the sale of its T-Mobile Netherlands business, the proceeds from which will fund part of the US buy, and amidst talk of changes elsewhere in its portfolio. Change is afoot at Deutsche Telekom, but for now it’s all about that valuable US asset.

Under the terms of the agreement, Deutsche Telekom will buy around 45 million T-Mobile US shares from Softbank, as part of a call option agreed at the time of the T-Mobile/Sprint merger last summer. The shares carry an average price of around US$118, giving a total value of $5.3 billion. It’s not a cash deal though. In return, Softbank will pick up 225 million newly-issued Deutsche Telekom shares, giving it a 4.5% stake in the German incumbent.

The second part of the deal should see Deutsche Telekom exercise further call options representing 1.6% of T-Mobile’s share capital. But it needs to get its hands on some cash first, and that’s where the Netherlands deal comes in.

Deutsche Telekom and minority shareholder Tele2 have agreed to sell T-Mobile Netherlands to a Warburg Pincus and Apax Partners backed group of investors for €5.1 billion, a deal that will – pending regulatory approvals and other closing conditions – confer €3.8 billion (around US$4.5 billion) in net cash proceeds on the German telco. It plans to use $2.4 billion of that to buy more T-Mobile US shares.

If it all comes together as planned, Deutsche Telekom’s stake in T-Mobile US will grow by 5.3% to 48.4%, the overall cost averaging out at $109 per share. T-Mobile’s shares closed at just over $136 last week, ahead of the holiday weekend, having peaked at close to $150 in July.

But it’s not just about buying shares at the right price. Deutsche Telekom has made no secret of the fact that it wants a bigger slice of the lucrative US mobile operation, which already contributes 60% of group revenues and around half of earnings. Indeed, its goal is to up its stake to over 50%.

“This is a very attractive transaction for Deutsche Telekom and its shareholders to further benefit from the value creation potential in T-Mobile US and beyond,” said Deutsche Telekom chief executive Timotheus Höttges.

“But we are not just increasing our stake in T-Mobile US – we are welcoming SoftBank as a new key investor and strategic partner for Deutsche Telekom,” he added. “I am thrilled by the value creation potential of this cooperation for both SoftBank and Deutsche Telekom.”

At first glance, this might seem a slightly unusual transaction for Softbank, which has spent the past few years repositioning itself into an outfit that looks more like an investment group than a telco. A European telecoms incumbent is not the obvious choice for Softbank.

But the question to ask is whether Softbank is buying into Deutsche Telekom as a telecoms operator or as a firm with an undervalued share price. There’s more than a hint towards the latter.

“The transaction is financially compelling,” Softbank said, in a statement. “SoftBank is exchanging TMUS shares underlying primarily fixed price options with no upside, for stock in DT, which SoftBank believes has significant long-term upside beyond the agreed reference price of €20.”

Nonetheless, the telcos are singing from the same hymn sheet when it comes to opportunities for joint investment and innovation, in areas such as global platform development and so forth.

“The long-term strategic partnership will create incredible opportunities for our portfolio companies to turbocharge their growth with access to approximately 300 million customers across Japan, Europe and the US in total,” said  Softbank’s group COO, chief executive of Softbank International, and former Sprint CEO Marcelo Claure, who will join the Deutsche Telekom supervisory board as part of the deal.

“The transaction diversifies our telecoms exposure and results in SoftBank becoming DT’s second largest private shareholder, while retaining meaningful exposure to high-growth TMUS. It also marks a decisive step for DT towards their stated objective of acquiring a majority stake in TMUS, and the addition of the world’s largest technology investor in SoftBank validates their Telco 2030 vision and demonstrates the ‘Magenta Advantage.’ I look forward to partnering with Tim and team long into the future,” said Claure.

All happy families then.

It might be a different story for Deutsche Telekom in the UK though, where speculation over the future of its 12% stake in BT has waxed and waned since it acquired the shares as part of the UK incumbent’s takeover of EE five years ago.

According to Reuters, Höttges told a media briefing on Tuesday that “something is going to happen” with the BT stake in the next 12 months, the implication being that the arrival of Altice as a shareholder could shake things up. “We are entertaining all options,” Höttges said.

Despite suggestions to the contrary a couple of years ago, a sale seems by far the most likely option for Deutsche Telekom now. But either way, it’s clear that the operator is rethinking its business at the top level and it’s safe to suggest there will be more strategic moves to come.