Free, France’s T-Mobile, Wants To Acquire T-Mobile For $15 Billion

France’s disruptive telecom company, Free, just announced that it wanted to acquire T-Mobile US. The WSJ first broke the story. Free then confirmed the bid in a press release.

Sprint was already in talks with T-Mobile for a potential acquisition. Now, Free (also known as Iliad) is offering $15 billion in cash for 56.6 percent of the American company at $33 per share. Overall, Free says that it values T-Mobile at a 42 percent premium compared to T-Mobile’s share price of $25.4 before rumors of the Sprint acquisition started making the rounds. Shares opened at $31.02 before rumors of Free’s bid surfaced.

This deal makes a lot of sense as T-Mobile is very reminiscent of Free’s strategy. In fact, T-Mobile’s uncarrier campaign could be inspired by its French counterpart.

Free is one of the major Internet service providers in France. It only started operating its mobile network in 2012. It is the so-called fourth mobile carrier, has a small 3G and LTE network and relies a lot on its current partnership with Orange.

Yet, the scrappy company was able to provide truly unlimited offers for a fraction of the price. Imagine unlimited talk, unlimited SMS and MMS messages, tethering and, even more important, unlimited data with a speed reduction after 20GB. All of this costs $25 a month (€20). And there is no contract. You can leave whenever you want.

T-Mobile adopted a similar strategy with unsubsidized phones, no contract and unlimited data. Prices are still much more expensive in the U.S., but that might be due to the larger territory. Both companies now even offer free roaming in some countries.

Now, T-Mobile investors can expect a bidding war between Sprint and Free. Many were concerned that a Sprint acquistion would create antitrust issues. The Department of Justice already blocked AT&T’s acquisition of T-Mobile, so it could happen again.

As Free doesn’t operate in the U.S., it doesn’t have a problem on this front. But Free is an even smaller company than T-Mobile. Its market capitalization is just $16 billion (€12 billion), so it would need to find strong banking partners to find all the needed cash to acquire T-Mobile. Nothing is done yet, but today’s news just made T-Mobile’s future much more interesting.