T-Mobile US Inc. and its German owners are advancing toward a long-awaited telecommunications union that would value Sprint Corp. at about $24 billion, according to people with knowledge of the matter.
Under the terms being discussed, T-Mobile backer Deutsche Telekom AG would receive a 42% stake and 69% of the voting interest in the combined company, said the people, who asked not to be identified because the talks are private.
The deal would value Sprint shares at about $6.10 apiece — below the roughly $6.50 at which they were trading on Friday afternoon in New York. Shares of Sprint tumbled as much as 14% to $5.56 in late trading after Bloomberg News reported on the valuation terms.
The latest discussions follow years of will-they-won’t-they merger deliberations between Sprint and T-Mobile. The two sides restarted talks earlier this year, after an earlier attempt collapsed in November. Previous discussions broke down last year after the two sides couldn’t agree on how to structure control of the combined entity, people familiar with the matter said at the time.
The deal could still fall apart as the companies hammer out long-contentious issues. Sprint, based in Overland Park, Kan., declined to comment on the discussions. T-Mobile, located in Bellevue, Wash., didn’t immediately respond to a request for comment.
Further complicating matters: Both companies have foreign owners, and a merger would reduce the U.S. wireless market to three major players. Tokyo-based SoftBank Group Corp. owns almost 85% of Sprint.
Shares of both companies climbed earlier on Friday after Reuters said that an agreement could be reached as soon as next week. The report sent Sprint up as much as 10%, while T-Mobile climbed 2.5%.