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Business

SoftBank close to announcing merger deal for Sprint, T-Mobile

Regulatory hurdles still loom for bid to join ranks of largest US mobile carriers

TOKYO -- SoftBank Group has reached a broad agreement to merge its Sprint unit with T-Mobile US, a long-sought-after move for the Japanese group that would create a rival to America's top two wireless carriers.

A deal could be announced as early as this month. Tokyo-based SoftBank owns 83% of Sprint, while German group Deutsche Telekom holds 64% of T-Mobile.

The parents are discussing merging the units via stock swap and are expected to start hammering out ownership ratios and other terms soon. Any merger plan would need the approval of the U.S. Federal Communications Commission and the U.S. Department of Justice.

Nasdaq-listed T-Mobile is the bigger of the two units by market capitalization, at around $50 billion. Sprint trades on the New York Stock Exchange and has a value of around $28 billion.

T-Mobile ranks third among U.S. wireless carriers by subscribers, followed by Sprint in fourth. Together, the pair would muster 131 million subscribers based on figures as of March 31 provided by U.S.-based Strategy Analytics. That would put them virtually even with second-ranked AT&T and within striking distance of market leader Verizon Communications.

Opposition from the FCC frustrated SoftBank's bid to acquire T-Mobile in 2014, under the Obama administration. But the prospects for consolidation among U.S. carriers have brightened with the pro-deregulation stance of President Donald Trump.

SoftBank had considered merging Sprint with cable television provider Charter Communications, taking a potentially easier route to antitrust approval. But Masayoshi Son's group went back to pursuing a deal for T-Mobile as the better choice for generating synergies.

(Nikkei)

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