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By Meagan Clark - Sprint Corporation (NYSE:S) has agreed to pay about $32 billion, or $40 per share, to buy T-Mobile US Inc. (NYSE:TMUS), Reuters reports, taking the third and fourth-largest U.S. mobile network operators one step closer in their merger that could happen as early as this summer.
The share price is 17 percent above T-Mobile US’s closing share price on Wednesday, and the shares have more than doubled after the company bought smaller competitor MetroPCS last year.
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The Sprint/T-Mobile merger will need to pass regulatory challenges from the U.S. Federal Communications Commission (FCC) and the Department of Justice (DOJ), which have both expressed a desire to have at least two more network operators competing against market leaders AT&T Inc. (NYSE:T) and Verizon Communications Inc (NYSE:VZ).
Three years ago, the regulators rejected AT&T’s $39 billion bid for T-Mobile, and AT&T paid T-Mobile’s owner, Deutsche Telecom (XETRA:DTEGn), a break-up fee of $6 billion.
Deutsche Telecom, which owns 67 percent of T-Mobile, would keep a 15 to 20 percent stake in the combined company in the sale to Sprint, Reuters reported. Sprint would pay T-Mobile more than $1 billion in cash and assets if the deal is rejected by regulatory authorities, the Wall Street Journal reported.