T-Mobile US Inc. is close to agreeing on tentative terms for a deal to merge with rival wireless carrier Sprint Corp., people familiar with the matter said. That would mark a major breakthrough in efforts to merge the third and fourth largest U.S. wireless carriers.
Japan’s SoftBank Group Corp, which controls Overland Park, Kan.-based Sprint, will own 40 to 50 percent of the combined company, two of the sources said on Friday, while T-Mobile owner Deutsche Telekom will own a majority stake. It’s unclear where the combined company would be headquartered.
The sources asked not to be identified because negotiations are confidential.
Once terms are finalized, due diligence by the two companies will follow and a deal is expected by the end of October, though talks may still fall through, the sources said.
The deal would also face regulatory scrutiny over concerns that the U.S. wireless market is becoming too concentrated.
A successful deal would create a business with more than 130 million subscribers, just behind Verizon Communications Inc and AT&T Inc. Revenues would top $70 billion and, say analysts, there would be massive scope to cut costs.
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