There is concern that a T-Mobile-Sprint deal would face scrutiny from regulators who feel that the USA wireless market is getting too concentrated.
Deutsche Telekom, T-Mobile's majority owner, would hold a majority stake, with SoftBank Group - Sprint's parent company - holding between 40%-50%, according to Reuters. Revenues would top $70 billion and, analysts said, there would be massive scope to cut costs.
The sources asked not to be identified because the negotiations are confidential. Both companies saw their stock prices rise on Friday, more so for Sprint, as Wall Street reacted to the news that a deal may be very close.
That would be the opposite of how things were going in 2014 when Sprint was attempting to buy T-Mobile.
Shares of Sprint rose more than 3% in pre-market trading this morning on the news; T-Mobile's stock was up more than 1% before the market opened.
A Sprint-T-Mobile merger that could shake up the U.S. wireless industry has been in the rumor mill for years.
The sources, citing confidentiality, hinted that a deal could be announced as soon as the end of October once due diligence is completed.
That deal would have put SoftBank in control of the merged company, with Deutsche Telekom becoming a minority shareholder.
In the years since, T-Mobile has rejuvenated its business with a series of bold and innovative initiatives under its Uncarrier campaign and the leadership of CEO John Legere, even bypassing Sprint to become the third largest carrier in the US. At the time, T-Mobile was struggling, and Sprint was looking at absorbing the then-tinier carrier.
A banker told THR that the talks have been on and off in recent months.