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Sprint, T-Mobile closing in on merger deal, reports say

UPDATED: Fri., Sept. 22, 2017

Spring and T-Mobile are close to reaching a merger deal, Reuters reports. (Dreamstime / Tribune News Service)
Spring and T-Mobile are close to reaching a merger deal, Reuters reports. (Dreamstime / Tribune News Service)
By Matt Campbell and Steve Vockrodt Kansas City Star

KANSAS CITY, Mo. – Sprint and T-Mobile are again reportedly close to agreeing to tentative terms for a merger.

Reuters, citing unnamed sources, reported Friday that SoftBank Group Corp., which controls Sprint, would own 40 percent to 50 percent of the combined new company, which would be dominated by T-Mobile majority owner Deutsche Telekom.

Rumors of a deal have percolated throughout the summer. Sprint did not respond to a request by the Kansas City Star for comment on the reports.

Unless the talks fall through, sources told Reuters, the deal could be announced by the end of October.

A deal, however it’s structured, could have a big impact on Kansas City. About 6,000 people work at Sprint’s headquarters in the suburban city of Overland Park, Kan.

Sprint has been cutting local jobs for the past several years.

CNBC, citing analyst reports, said that a combined company would top $70 billion in revenues. The same CNBC report pointed out that T-Mobile has outperformed Sprint under chief executive John Legere, who would reportedly lead a combined company.

Sprint chief executive Marcelo Claure could make $130.87 million in cash, stock and other benefits as a result of a merger if the deal moved him out of the combined company.

Sprint stock price jumped up nearly 6 percent on Friday on reports of the possible deal; T-Mobile stocks were up marginally.

A merger between Sprint, the fourth-largest wireless carrier in the U.S., and T-Mobile, the third largest, would require approval from antitrust regulators. The combination would reduce the number of major wireless carriers in the U.S. to three.

The combined company would still rank third in subscribers behind Verizon and AT&T.

T-Mobile has been a target for merger deals in the last six years. In 2011, AT&T announced its plan to buy T-Mobile but later backed off on news the Justice Department would attempt to block the transaction due to antitrust concerns.

Those same concerns scuttled a 2014 attempt by Sprint and SoftBank to acquire T-Mobile.

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