Sprint has agreed to purchase T-Mobile US for $32 billion. This marks further progress in the attempt to merge the third and fourth-biggest U.S. mobile network operators, according to Reuters.
If approved, the purchase calls for Sprint to pay a 17 percent premium to T-Mobile USs closing share price on Wednesday.
Earlier today, Bloomberg said that an agreement between Sprint and Deusche Telekoms T-Mobile US was very close.
SoftBank Corp. CEO Masayoshi Son has a 80 percent take in Sprint.
According to Hannes Wittig, an analyst at JP Morgan, the $40 price is too low “T-Mobile US should be worth more than that given that the synergies should exceed $20 billion, Deutsche Telekom would share some of the execution risk and Sprint would be getting control … Somewhere in the high 40s would be more appropriate,” he said.
Analysts see the regulatory challenge as the biggest hurdle facing the companies since both the U.S. Federal Communications Commission (FCC) and Department of Justice (DOJ) have expressed a desire to have at least two more network operators competing against the market leaders AT&T and Verizon.
In May, Bloomberg reported that T-Mobile CEO John Legere is the leading candidate to run the combined company.