Deutsche Telekom will reportedly look to merge its T-Mobile US unit with rival Sprint, and abandoned any previous plans to sell it US business.
German newspaper Handelsblatt, citing sources close to Deutsche Telekom’s executive and supervisory board, reported the company favours an all-stock deal with Sprint over a sale of the business, which was mooted in the past.
The German operator also aims to take control of the merged entity should a deal surface.
According to the report, T-Mobile US is now sounding out whether it will face any government objections to a deal with Sprint, which is owned by Japan-based SoftBank.
Rumours have been circulating in recent months a deal between the two US operators is in the offing, after both SoftBank CEO Masayoshi Son and Deutsche Telekom CEO Tim Hottges stated they would be interested in pursuing such a merger.
The companies tried to merge in 2014, but the deal fell apart due to regulatory concerns. At the time, Sprint attempted to buy T-Mobile US, which was languishing as the country’s fourth largest operator.
However, the tables have now turned, with T-Mobile going from strength to strength in recent years, while Sprint is now struggling to maintain market share.
T-Mobile US displaced Sprint as the country’s third largest operator.
To secure a deal, Deutsche Telekom will now have to convince SoftBank’s Son to give it control of the merged entity, as well as convince President Donald Trump’s government to allow the deal to go through.
Bloomberg reported the two companies kicked off informal talks about a possible merger in May, although this remains unconfirmed.