Deutsche Telekom: Merger Rumours, Union Ballot, and a €2 Billion Buyback Shape a Tense Week for Investors

Shares hover above 52-week low as buybacks and union wage vote aim to stem decline; T-Mobile US merger explored.

Deutsche Telekom shares are clinging to support just above their 52-week low, with the stock sliding 1.63% to €26.55 on the day the company’s union wage deal goes to a vote. The equity has lost roughly 12.7% since the start of the year and has fallen about 8% over the past 30 days, leaving the relative strength index at 32.4 — a territory that typically signals an oversold condition but has so far failed to lure buyers.

The Bonn-based telecom giant has been aggressively buying back its own stock in a bid to stem the decline. Since launching its programme on 2 April, the company has repurchased more than 15 million shares, with the total authorised spend reaching up to €2 billion by year-end. In the week from 8 to 12 June alone, Deutsche Telekom snapped up 1.6 million shares for around €45.1 million at a volume-weighted average price of €27.90 — well above the current trading level. Despite this, the stock remains under pressure, hovering a mere 2% away from its 52-week trough of €25.99.

A key source of cash for the buyback and the company’s domestic fibre rollout is its US subsidiary, T-Mobile US. The unit recently lifted its quarterly dividend by nearly 16% to $1.02 per share. Deutsche Telekom owns roughly 53% of T-Mobile US, so those payouts flow directly into the parent’s coffers — and ultimately into Germany’s broadband expansion. Yet broader concerns over US regulatory headwinds and rising competition from satellite players such as Starlink continue to weigh on sentiment.

Today’s union ballot could remove another layer of uncertainty. The ver.di tariff commission is voting on a wage package covering around 60,000 employees. If approved, the deal would run until the end of 2028, providing long-term planning security. The terms include phased monthly increases of €340 from August 2026 and €480 from July 2027, plus a ban on compulsory redundancies for 33 months. A positive outcome would also rule out further strikes, easing a persistent operational headache.

Adding to the mix, the Wall Street Journal has reported that Deutsche Telekom’s management is exploring a full merger with T-Mobile US into a single multinational holding company, listed on both a European and an American exchange. The logic is clear: T-Mobile US already accounts for more than 70% of the group’s market capitalisation, while the German business trades at a deep discount. Consolidating under one roof could close that valuation gap. But the hurdles are significant. A deal would require US regulatory approval, and the German state — which holds around 28% of Deutsche Telekom — would also have to give the green light.

Operationally, the group is on solid footing. In the first quarter, adjusted EBITDA AL rose 7.5% to €11.5 billion, and the stock trades on a price-to-earnings multiple of about 13.8 — moderate by sector standards. Yet the gulf between market perception and underlying performance is wide. The shares sit more than 21% below their 52-week high of €34.35.

With the union vote due to be decided today and second-quarter results scheduled for 6 August, the near-term trajectory hinges on whether the combination of a settled labour deal, sustained buybacks, and steady US dividends can tip the balance. For now, the technical picture suggests a bounce is possible, but the market is waiting for a catalyst beyond the company’s own buying programme.