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US: Sprint, T-Mobile craft a plan

 |  July 14, 2014

As major media merger deals try to weave their way through regulatory clearance in the US, Sprint and T-Mobile are poised to become the next deal on the review block.

According to reports, Sprint parent company SoftBank and T-Mobile parent company Deutsche Telekom have struck an agreement on the basics of a merger in the US, a deal that would combine the nation’s third- and fourth-place wireless operators. The agreement would see SoftBank acquiring 50 percent of T-Mobile shares from Deutsche Telekom; Deutsche Telekom currently owns 67 percent of T-Mobile.

But, reports say, the German company remains unconvinced that the deal would pass regulatory clearance.

Both the Federal Communications Commission and the Department of Justice must approve of the merger. Authorities are also reviewing the proposed mergers between Comcast and Time Warner Cable, and AT&T and DirecTV.

All three deals are expected to face intense scrutiny. Deutsche Telekom has reportedly secured a $2 billion breakup fee should the merger between Sprint and T-Mobile fail.

But SoftBank has championed the combination, arguing that the deal is the only way to introduce a competitors strong enough to rival market leaders AT&T and Verizon.

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