Shares in Sprint Corp. (NYSE:S) and T-Mobile US Inc. (NASDAQ:TMUS) were both higher in pre-market trading after Reuters reported the cellphone carriers are close to agreeing tentative terms on a merger.
Citing people familiar with the matter, Reuters said the terms would see Sprint's majority shareholder, Japan's Softbank Group Corp. own 40% to 50% of the combined entity, with T-Mobile parent Deutsche Telekom AG having a majority stake.
Reuters said a deal is expected by the end of October, according to the sources, though talks may still fall through.
A successful merger would create a business with more than 130 million subscribers, just behind Verizon Communications Inc (NYSE:VZ) and AT&T Inc (NYSE:T)
In pre-market New York trading today, Sprint shares were up 3.6% at US$8.32, while T-Mobile shares added 1.4% at US$64.25..