Deutsche Telekom and MetroPCS Communications have confirmed that they have signed a “definitive agreement” to combine the T-Mobile USA and MetroPCS mobile phone networks. In other words, it’s a done deal folks.

The two companies say the merger will create “the leading value carrier “in the U.S. wireless marketplace, although in reality it will continue to sit as the fourth largest network operating in America. However, it’s also true that the acquisition will help strengthen the position of T-Mobile USA against its closest competitors, in part by increasing its user base to 42.5 million. Sprint, which is in third place, is estimated to have 56.4 million customers in comparison.

The acquisition means that the new, combined company will only operate under the T-Mobile brand name albeit with better coverage, “deeper” LTE network support and improved financial resources. Presumably, the MetroPCS identity will be dropped almost entirely.

Today’s announcement has also revealed that the deal has been structured as a recapitalization. MetroPCS will declare a “one for two” reverse split in stocks, paying its shareholders $1.5 billion in the process, or roughly $4.09 a share. It will then allocate almost three quarters of its new stock to T-Mobile’s parent, Deutsche Telekom, before finally issuing MetroPCS’ investors with the remaining 26 percent.

It is understoof that both MetroPCS’ board of directors and Deutsche Telekom’s supervisory board approved the deal.

René Obermann, Chief Executive Officer of Deutsche Telekom, said the two brands were suited to one another both “operationally and culturally”.

“The new company will be the value leader in wireless with the scale, spectrum and financial and other resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate, especially around the next-generation LTE network.

We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment.”

It’s likely that T-Mobile USA has used the funds that it carried over from its failed merger with AT&T last year to finance the deal. At that time AT&T was willing to spend $39 billion for the company, but when the deal broke down it was reported that the carrier lost $4 billion in the process. Ouch.

T-Mobile USA hasn’t been the only carrier thinking about acquiring MetroPCS though. Reports in February said that Sprint was just hours away from signing a deal worth roughly $8 billion for the company. Dane Hesse, the Chief Executive of Sprint, had signed on the dotted line to make it happen, however Sprint’s board of directors quickly stopped it from happening. In the end, nothing seemed to come of it.

Since then the rumour mill has been pointing towards T-Mobile USA, and it looks the firm has finally obliged.

Image credit: Andrew Burton / Getty Images