By Ryan Knutson
Sprint Corp. and T-Mobile US Inc. have agreed on the broad terms
of a merger worth around $50 billion and are working toward a final
agreement, people familiar with the matter said.
Under the framework, Sprint would acquire T-Mobile for around
$40 a share in a deal that could happen early this summer, the
people said.
A deal could still fall through, but if completed would combine
the country's third and fourth largest wireless operators, creating
a bigger competitor to market leaders Verizon Communications Inc.
and AT&T Inc. but leaving consumers with fewer choices for
service.
A deal would face strong opposition from regulators and a
lengthy antitrust review, and Sprint would pay T-Mobile more than
$1 billion in cash and other assets if it is shot down, the people
said.
T-Mobile's largest shareholder, Germany's Deutsche Telekom AG,
would retain a stake of 15% to 20% in the new company, the people
said. The deal would be worth around $50 billion including debt,
the people said.
The companies are also considering forming a joint venture to
bid together in upcoming auctions of wireless airwaves currently
held by television broadcasters, the people said.
The sides began working with a renewed sense of urgency last
month after the Federal Communications Commission voted to approve
rules for a key auction of airwaves currently held by broadcasters,
expected to take place in 2015. The companies both felt revisions
the agency made to the auction rules would help their case for a
merger, according to several people familiar with the matter.
Dana Mattioli contributed to this article.
Write to Ryan Knutson at ryan.knutson@wsj.com
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