Deutsche Telekom (DT) - Get Report will announce Monday morning that it has hammered out a $55.7 billion cash-stock-debt deal to acquire VoiceStream Wireless (VSTR) , according to several media reports. The deal, expected to include a $5 billion cash infusion that is likely to take the form of a convertible security, will give VoiceStream the means to take part in wireless license auctions set for this fall. And it will give Deutsche Telekom a long-sought foothold in the U.S. telecom market.

VoiceStream is also the only U.S. operator that uses technology similar to the GSM standard dominant throughout Europe, which will allow Deutsche Telekom to link equipment in a cost-efficient manner. Deutsche Telekom will reportedly pay 3.2 of its own shares plus $30 in cash for each VoiceStream share. At Deutsche Telekom's closing price Friday of $51.50, this represents a 30% premium to VoiceStream's closing price Friday of $149 3/4.

The prospect that Deutsche Telekom is overpaying caused its shares to tumble 9.3% during the last three trading sessions of the week, however. And if the market hasn't looked kindly on the deal, some U.S. legislators are taking an even dimmer view. When news of the impending acquisition broke last Wednesday, Sen. Ernest F. Hollings (D-South Carolina) responded with draft legislation that would forbid the

Federal Communications Commission

from waiving restrictions that apply to companies that are more than 25% owned by foreign governments. Deutsche Telekom is 58% owned by the German government, although the new stock it will have to issue to acquire VoiceStream will reportedly dilute this stake to 48%.

Holling's bill has garnered the support of 30 U.S. senators and similar legislation is expected to be introduced in the House of Representatives shortly. However, the European Union responded Saturday with a threat that any legislative attempt to scuttle the deal could lead it to withdraw from

World Trade Organization

commitments on telecoms. The European Commission is expected to formalize its stance in a warning letter expected to be sent Monday to U.S. Trade Representative Charlene Barshefsky, according to

The Financial Times

.

Deutsche Telekom has been seeking ways to enter the U.S. market for quite some time and has been mentioned as a possible bidder for

Sprint

(FON)

or

Qwest Communications International

(Q)

. Along with VoiceStream, the Sprint subsidiary (Sprint PCS

(PCS)

) is one of the few independent wireless networks in the U.S.