Sprint close to buying T-Mobile USA for $32 bn

Sprint Corp, the third-largest US wireless carrier is reportedly close to finalising terms on buying T-Mobile USA Inc in a $32 billion deal, according to several US media reports.

Sprint, majority owned by Japan's SoftBank Corp, is offering to pay around $40 per share in half stock and half cash, valuing the third-largest US wireless carrier at around $32 billion.

The total deal would be worth about $40 billion, including $8.7 billion debt of T-Mobile USA, and Sprint will pay $1 billion breakup fee should the deal not go through.

Germany-based Deutsche Telekom, which holds 67 per cent of T-Mobile USA, will hold a 15 – 20 per cent stake in the merged company, according to various reports.

The reports said that details like due diligence, financing the deal, and management of the new company have still to be worked out.

The merger of Sprint and T-Mobile USA would create a strong challenger with around 94 million subscribers to larger rivals AT&T Inc and Verizon Wireless, which have over 94 million and 115 million customers respectively.

Softbank chairman Masayoshi Son has been looking to expand in the US after he acquired 70 per cent of Sprint in 2012 for $20.1 billion. (See: Japan's Softbank to buy 70 % stake in Sprint Nextel for $20.1 bn)

But the deal would face intense scrutiny from US regulators and the Federal Communications Commission and the Justice Department have already voiced their concerns about the merger.

In late 2011, AT&T dropped its $39-billion proposed takeover of T-Mobile USA after the deal faced opposition from the antitrust authorities in the Obama administration. (See: AT&T drops proposed $39-bn T-Mobile USA takeover)

US regulators are already scrutinizing the $45.2-billion proposed merger between cable television operators Comcast Corp and Time Warner Cable, and the $48.5 billion proposed acquisition of satellite broadcaster DirecTV by AT&T.