Sprint Corp. and T-Mobile US Inc., in preliminary deal talks since at least August, agreed that Deutsche Telekom AG would have control in a combination of the two companies, said a person with direct knowledge of the matter.
The mobile operators are discussing a stock-for-stock merger, though they are still weeks away from an agreement, according to the person, who asked not to be identified because the talks are private. Shares of Sprint and T-Mobile rose. Both companies declined to comment.
Deutsche Telekom would put T-Mobile executives, led by Chief Executive Officer John Legere, in charge of the combined company, the person said. That’s important for the German carrier, which owns about 64 percent of T-Mobile and has come to rely on it as a key driver of sales and earnings growth, according to a second person familiar with the talks. It favors a deal with Sprint because potential savings could come relatively quickly, the person said.
The idea of a combination between the No. 3 and No. 4 carriers was shot down by regulators in 2014, but with a new administration preliminary discussions picked up earlier this year. Washington regulators appointed by President Donald Trump haven’t signaled an insistence on maintaining a four-player nationwide wireless market that was a feature of the preceding administration.