T-Mobile U.S. the wireless carrier based in the United States is looking into taking over Sprint Corp, a big rival, in a deal for all stock, after SoftBank Group offered to relinquish its majority ownership of Sprint, said a person close to the situation.
The current negotiations come following a report earlier in 2017 that SoftBank, based in Japan, was ready to give control of Sprint up to clinch its merger with T-Mobile. It would retain just a minority stake in the new combined entity.
T-Mobile and Sprint, which is controlled by Deutsche Telekom AG based in Germany, are weeks from any agreement, and still have not reached an agreement on the ratio for the share exchange, or even begun carrying out due diligence on one another, said the source.
However, the two companies agreed that T-Mobile’s CEO the outspoken John Legere would run the new entity should a deal take place, said the anonymous source. Both T-Mobile and Sprint did not respond to messages requesting comments.
Shares of Sprint increased 8.2%, while those of T-Mobile were up close to 5.3%, after progress in negotiations was first reported.
Despite the possibility of anti-trust issues, investors have expected for a long time that a deal between the two would be reached. The two are the third and fourth largest providers of wireless service in the U.S. and hope a deal will cut costs and provide several synergies.
T-Mobile has gained market share of late from larger competitors in the U.S. No. 1 Verizon Communications and No. 2 AT&T, in a wireless market in the U.S., through lower prices and improvements to its networks.
Sprint, which earlier had approached Charter Communications the cable company about a possible merger, has put its plans at this time on hold with Charter as it tries to focus on its current negotiations with T-Mobile.
Altice USA Inc., owned by Patrick Drahi the cable mogul from France is continuing to work on a possible bid for Charter, said another source. Altice did not comment while Charter would not respond to request to make comments.
In August, the CEO at Sprint said there would soon be an announced made on the merger talks.
SoftBank abandoned talks previously to take over T-Mobile and merge it three years ago with Sprint, amidst opposition from antitrust regulators in the U.S.
That deal was going to put control of the new entity in the hands of SoftBank, with Deutsche Telekom taking a minority share.