<PAGE> 1
Filed by Deutsche Telekom AG
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: VoiceStream Wireless Corporation
Exchange Act File Number 000-29667
<PAGE> 2
THE FOLLOWING IS A PRESS RELEASE DISSEMINATED BY POWERTEL, INC. AND VOICESTREAM
WIRELESS CORPORATION ON AUGUST 27, 2000
2
<PAGE> 3
[VOICESTREAM LOGO]
[POWERTEL LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
POWERTEL TO BE ACQUIRED
VOICESTREAM COVERAGE TO EXPAND TO MORE THAN 245 MILLION POTENTIAL U.S. WIRELESS
CUSTOMERS
BELLEVUE, WASHINGTON/WEST POINT, GEORGIA - August 27, 2000 - VoiceStream
Wireless Corporation (NASDAQ: VSTR), and Powertel, Inc. (NASDAQ: PTEL) today
announced that they have entered into a definitive agreement for VoiceStream
Wireless to acquire Powertel. The proposed transaction will substantially expand
VoiceStream's all digital GSM wireless coverage in the Southeastern United
States.
Powertel owns wireless licenses covering 25 million people (POPs) and
operates a GSM network spanning 12 states in the Southeastern United States, in
areas where VoiceStream currently does not market its wireless services. As of
June 30, 2000, Powertel had approximately 727,000 customers, year-to-date total
revenues of $212.3 million and positive operating cash flow for the last two
quarters.
"Powertel is a natural fit into VoiceStream's ever expanding nationwide
footprint," said John W. Stanton, chairman and chief executive officer of
VoiceStream. "We are excited to bring our 'Get More' promise to consumers in the
Southeast, providing them with the best value in wireless service. Powertel
brings a substantial number of new customers and a terrific operating team of
talented employees. Powertel's vast GSM network - with more than 3,000 miles of
highway coverage and access to 25 million people - will provide VoiceStream with
excellent coverage and access to the rapidly growing Southeastern United States.
With Powertel and its affiliates, we estimate that we will have nearly 250
million licensed POPs, and with the addition of the Atlanta market, will have
licenses to serve 24 of the top 25 markets in the United States."
"This merger is a win-win proposition for Powertel shareholders, our
employees and our customers," said Allen E. Smith, Powertel president and chief
executive officer. "We believe the combination of Powertel with VoiceStream will
offer substantial economies of scale to strengthen our overall competitive
position in the Southeast and other parts of the United States. Since our
initial launch in late 1996, Powertel has become a leader in offering customers
in the Southeastern United States simplified and economical wireless services
with excellent network coverage. Our customers can drive from Kentucky to
Florida with continuous wireless coverage at one economical rate. Together we
will have the necessary resources and expertise to
3
<PAGE> 4
provide our customers with even more advanced and economical wireless services."
Under the terms of the VoiceStream/Powertel merger agreement, holders of
Powertel common and preferred stock will receive VoiceStream common shares at a
conversion ratio ranging from .65 if the average closing price of VoiceStream
common stock is $130.77 or above and .75 if the average closing price of
VoiceStream common stock is $113.33 or below. Between these two points the ratio
adjusts to yield $85 in VoiceStream common stock for each share of Powertel
common stock equivalent. The average closing price of VoiceStream common stock
will be based on an average of 10 randomly selected trading days during the 20
day period ending 5 trading days prior to the closing. The conversion ratios are
subject to certain adjustments.
Deutsche Telekom AG (NYSE: DT, FSE: DTE), as previously announced, has
agreed to acquire VoiceStream. To facilitate the combination of the three
companies, Deutsche Telekom and Powertel have entered into a separate definitive
agreement for Deutsche Telekom to acquire Powertel and for the Powertel
shareholders to receive 2.6353 Deutsche Telekom shares for each share of
Powertel common stock, subject to certain adjustments. Based on the closing
price of the Deutsche Telekom ordinary shares on the Frankfurt Stock Exchange on
August 25, 2000 of Euro 44.30 (the equivalent of approximately US $39.98), each
share of Powertel common stock would have a potential value of US $105.36. The
Deutsche Telekom/Powertel acquisition is expected to close immediately after the
Deutsche Telekom/VoiceStream acquisition closes. The VoiceStream/Powertel merger
will not close if the Deutsche Telekom/VoiceStream merger is consummated. Thus,
Powertel shareholders will receive Deutsche Telekom shares unless the merger
between VoiceStream and Deutsche Telekom is terminated. The transaction
structure was designed to provide U.S. tax deferred treatment to Powertel
shareholders.
There are approximately 55.9 million outstanding Powertel shares on a fully
diluted basis, including shares underlying outstanding options, warrants and
convertible preferred shares and shares potentially issuable in connection with
the pending Powertel - DiGiPH transaction. Based on this number of outstanding
Powertel shares, Deutsche Telekom would issue up to approximately 147.3 million
new shares. Holders of Powertel preferred shares will exchange their shares on
the basis of the number of underlying Powertel common shares.
Approximately $1.2 billion in Powertel debt will be assumed. Major
shareholders of Powertel and VoiceStream owning more than 50 percent of the
outstanding shares of each of Powertel and VoiceStream, respectively, have
agreed to vote in favor of the mergers. The transactions are also subject to
regulatory approvals, including approval of the Federal Communications
Commission, Powertel and VoiceStream stockholder approvals, and other customary
closing conditions.
For the six months ending June 30, 2000, VoiceStream and Powertel reported
combined total revenues of approximately $923 million and collectively served
approximately 3.3 million digital wireless customers. Powertel achieved positive
operating cash flow for the first time in the first quarter of 2000 and again in
the
4
<PAGE> 5
second quarter of 2000 and had approximately $280 million in cash and cash
equivalents at June 30, 2000.
VoiceStream is being advised by Goldman, Sachs & Co. Powertel is being
advised by Morgan Stanley Dean Witter. Deutsche Telekom is being advised by
Donaldson Lufkin & Jenrette.
ABOUT VOICESTREAM
Based in Bellevue, WA, VoiceStream Wireless is a leading provider of
wireless communications services in the United States. Nearly three out of every
four people in the United States live in areas currently licensed to be served
by VoiceStream or its affiliates. VoiceStream is the largest provider of
personal communication services using the globally accepted GSM technology in
the United States. VoiceStream is a member of the North American GSM Alliance
LLC, a group of U.S. and Canadian digital wireless PCS carriers. The GSM
Alliance helps provide GSM wireless communications for their customers in more
than 5,500 U.S. and Canadian cities and towns as well as international service.
Adopted by 149 countries, GSM is the most widely used digital wireless standard
in the world with more than 330 million subscribers on six continents, which
offers an unprecedented roaming advantage to GSM wireless consumers. VoiceStream
has roaming agreements with more than 125 of the major operators worldwide
providing service in 55 countries. Visit the VoiceStream web site at
www.voicestream.com.
ABOUT POWERTEL
Powertel, Inc. provides 100 percent digital PCS wireless services in its
licensed service area in 12 states in the Southeast - one of the largest
contiguous PCS networks in the Southeastern United States. Through its
affiliation with other GSM carriers, Powertel's coverage extends across the
United States to most major cities and into much of Canada to a population of
more than 180 million people. Powertel's core markets are in 34 Southeastern
metropolitan areas and along the major highway corridors that connect them.
Athens, Atlanta, Augusta, Columbus, Birmingham, Chattanooga, Jackson,
Jacksonville, Knoxville, Lexington, Louisville, Macon, Memphis, Nashville and
Savannah are among the municipalities in Powertel's licensed service area. These
areas have an estimated population of more than 25 million people. Visit the
Powertel web site at www.powertel.com
ABOUT DEUTSCHE TELEKOM
Deutsche Telekom is Europe's largest telecommunications company and the
fourth largest carrier worldwide, with 1999 revenues of EUR 35.5 billion ($ 35.7
billion). Deutsche Telekom offers its customers a complete range of products and
services through more than 48 million telephone lines. It is a leading provider
of high-speed digital access lines, with more than 15.3 million marketed ISDN
channels, and new ADSL services that will be available in 60 percent of Germany
by the end of 2000 and 90 percent of the
5
<PAGE> 6
country by the end of 2001. In online services, T-Online Deutsche Telekom
subsidiary is Europe's largest Internet provider with more than 6.0 million
customers. Via its mobile subsidiary T-Mobile, Deutsche Telekom serves
approximately 21.3 million mobile telephony customers in Europe through
majority-controlled operations. Deutsche Telekom will become the second largest
European provider of information technology solutions to multinational companies
worldwide upon regulatory approval of its majority investment in debis
Systemhaus. Visit the Deutsche Telekom web site at:
www.telekom.de/international.
This press release contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions of
the U.S. federal securities laws. Because these forward-looking statements are
subject to risks and uncertainties, actual future results may differ materially
from those expressed in or implied by the statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' ability to
control or estimate precisely, such as future market conditions, currency
fluctuations, the behavior of other market participants, the actions of
governmental regulators and other risk factors detailed in Deutsche Telekom's,
VoiceStream's, and Powertel's reports filed with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. The companies do not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of this press release.
Investors and security holders are advised to read the proxy
statement/prospectus regarding the transactions referenced in this press
release, when it becomes available, because it will contain important
information. The proxy statement/prospectus will be filed with the Securities
and Exchange Commission by Deutsche Telekom, VoiceStream and Powertel. Security
holders may obtain a free copy of the proxy statement/prospectus (when
available) and other related documents filed by Deutsche Telekom, VoiceStream,
and Powertel at the Commission's website at www.sec.gov or at the Commission's
public reference room located at 450 Fifth Street, NW, Washington D.C 20549 or
at one of the Commission's other public reference rooms in New York, New York
and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information of the public reference rooms. When available, the proxy
statement/prospectus and the other documents may also be obtained from Deutsche
Telekom by contacting Deutsche Telekom, Attention: Petra Michalscheck, Investor
Relations, 140 Friedrich-Ebert-Allee, 53113 Bonn, Germany and/or Deutsche
Telekom, Inc., Attention: Brigitte Weniger, 280 Park Avenue, 26th Floor, New
York, New York 10017; VoiceStream Wireless Corporation by contacting VoiceStream
Wireless Corporation, Attention: Ken Prussing, Executive Director, Investor
Relations, 3650 131st Avenue SE, Bellevue, WA 98006; and Powertel, Inc. by
contacting Powertel, Inc., Attention Kevin Inda, Vice President Investor
Relations, 1239 O.G. Skinner Drive, West Post, GA 31833.
VoiceStream and Powertel, and their respective directors, executive
officers and certain other members of VoiceStream and Powertel management and
employees may be soliciting proxies from VoiceStream and Powertel shareholders,
respectively, in favor of the mergers. Information concerning the participants
will be set forth in the proxy statement/prospectus when it is filed with the
Securities and Exchange Commission
CONTACT INFORMATION:
VoiceStream
-----------
Investors: Ken Prussing, 877-853-8682
Media: Kim Thompson, 425-653-5027
Sard Verbinnen, Jim Barron 212-687-8080
6
<PAGE> 7
Powertel, Inc.,
---------------
Investors: Kevin Inda, 706-634-1218
Media: Joe Patterson, 706-634-1493
Deutsche Telekom
----------------
Investors: Nils Paellmann, 212-424-2951
Media: Bill McAndrews, 212-424-2996 or 011-49-171-561-5441
Kekst and Company, Todd Fogarty, 212-521-4854
####
7
<PAGE> 8
THE FOLLOWING IS A PRESS RELEASE DISSEMINATED IN EUROPE BY DEUTSCHE TELEKOM AG
ON AUGUST 28, 2000
8
<PAGE> 9
US MOBILE PROVIDER POWERTEL TO BE ACQUIRED
VOICESTREAM COVERAGE TO EXPAND SUBSTANTIALLY IN THE UNITED STATES
Bonn, August 28, 2000 - VoiceStream Wireless Corporation (Nasdaq: VSTR), and
Powertel, Inc. (Nasdaq: PTEL) today announced that they have entered into a
definitive agreement for VoiceStream Wireless to acquire Powertel. The proposed
transaction will substantially expand VoiceStream's GSM mobile coverage in the
Southeastern United States.
As previously announced, Deutsche Telekom (NYSE: DT, FSE: DTE) has agreed to
acquire VoiceStream, one of the leading national mobile carriers in the United
States. To facilitate the combination of the three companies, Deutsche Telekom
and Powertel have entered into a separate definitive agreement for Deutsche
Telekom to acquire Powertel and for the Powertel shareholders to receive 2.6353
Deutsche Telekom shares for each share of Powertel common stock, subject to
certain adjustments. Based on the closing price of the Deutsche Telekom ordinary
shares at the Frankfurt Stock Exchange on August 25, 2000 of EUR 44.30
(approximately US$ 39.98), each share of Powertel common stock would have a
potential value of US$ 105.36. Based on approximately 55.9 million fully diluted
Powertel shares, Deutsche Telekom would issue up to approximately 147.3 million
new shares. This represents a transaction value of approximately US$ 5.89
billion. The Deutsche Telekom/Powertel acquisition is expected to close
immediately after the Deutsche Telekom/VoiceStream acquisition closes. The
separate VoiceStream/Powertel merger will not close if the Deutsche
Telekom/VoiceStream merger is consummated. Thus, the Powertel shareholders will
receive Deutsche Telekom shares unless the merger between VoiceStream and
Deutsche Telekom is terminated. The transaction structure was designed to
provide U.S. tax deferred treatment to Powertel shareholders.
Approximately $1.2 billion in Powertel debt will be assumed. Certain principal
shareholders of Powertel agreed to hold the Deutsche Telekom shares they would
receive in the transaction for a certain period of time. Major shareholders of
Powertel and VoiceStream owning more than 50 percent of the outstanding shares
of each of Powertel and VoiceStream, respectively, have agreed to vote in favor
of the mergers. The transactions are subject to regulatory approvals, including
approval of the Federal Communications Commission, Powertel and VoiceStream
shareholder approvals and other customary closing conditions.
Powertel owns mobile licenses covering 25 million people and operates a GSM
network spanning 12 states in the Southeastern United States, in areas where
VoiceStream currently does not market its mobile services. As of June 30, 2000,
Powertel had approximately 727,000 customers, year-to-date total revenues of
$212.3
9
<PAGE> 10
million and positive operating cash flow for the last two quarters. Together
with Powertel, Voicestream will own licenses covering 245 million people in the
United States, of which 118 million already have coverage. With the addition of
the Atlanta market covered by Powertel, VoiceStream will serve 24 of the top 25
markets in the United States. As of the end of the second quarter 2000,
VoiceStream and Powertel together served approximately 3.3 million subscribers.
This press release contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions of
the U.S. federal securities laws. Because these forward-looking statements are
subject to risks and uncertainties, actual future results may differ materially
from those expressed in or implied by the statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' ability to
control or estimate precisely, such as future market conditions, currency
fluctuations, the behavior of other market participants, the actions of
governmental regulators and other risk factors detailed in Deutsche Telekom's,
VoiceStream's, and Powertel's reports filed with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. The companies do not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of this press release.
Investors and security holders are advised to read the proxy
statement/prospectus regarding the transactions referenced in this press
release, when it becomes available, because it will contain important
information. The proxy statement/prospectus will be filed with the Securities
and Exchange Commission by Deutsche Telekom, VoiceStream and Powertel. Security
holders may obtain a free copy of the proxy statement/prospectus (when
available) and other related documents filed by Deutsche Telekom, VoiceStream,
and Powertel at the Commission's website at www.sec.gov or at the Commission's
public reference room located at 450 Fifth Street, NW, Washington D.C 20549 or
at one of the Commission's other public reference rooms in New York, New York
and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information of the public reference rooms. When available, the proxy
statement/prospectus and the other documents may also be obtained from Deutsche
Telekom by contacting Deutsche Telekom, Attention: Petra Michalscheck, Investor
Relations, 140 Friedrich-Ebert-Allee, 53113 Bonn, Germany and/or Deutsche
Telekom, Inc., Attention: Brigitte Weniger, 280 Park Avenue, 26th Floor, New
York, New York 10017; VoiceStream Wireless Corporation by contacting VoiceStream
Wireless Corporation, Attention: Ken Prussing, Executive Director, Investor
Relations, 3650 131st Avenue SE, Bellevue, WA 98006; and Powertel, Inc. by
contacting Powertel, Inc., Attention Kevin Inda, Vice President Investor
Relations, 1239 O.G. Skinner Drive, West Post, GA 31833.
10
