T-Mobile, Sprint Nearing Mega Wireless Deal (Report)

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The merger of the third and fourth largest U.S. wireless providers would create a new giant to better compete with AT&T and Verizon.

Wireless giants T-Mobile US and Sprint are nearing an agreement on terms of a mega-deal that would merge the two and create a company that could better compete with AT&T and Verizon.

Reuters reported the news Friday, citing unnamed people familiar with the situation.

The two firms, currently the third and fourth largest U.S. wireless providers, have been in talks for months. Together, they would have annual revenue of around $70 billion and more than 130 million subscribers.

Japan's SoftBank, which controls Sprint, would own a 40 percent to 50 percent stake in the combined giant, with T-Mobile majority owner Deutsche Telekom holding a majority stake, Reuters said.

A banker told THR that the talks have been on and off in recent months. The companies couldn't immediately be reached for comment.

The combination is expected to get close regulatory scrutiny to see whether the wireless market is getting too concentrated. A deal is expected to lead to cost cuts.

Both companies' stocks rose early Friday. Sprint shares were up 4.5 percent as of 10:10 a.m. ET, while T-Mobile US was up 1.4 percent.