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Japan’s SoftBank Corp is in talks to acquire U.S. wireless carrier T-Mobile US Inc and is discussing funding for a deal with financial institutions, if sources are to be believed;
SoftBank is looking to have its recently acquired U.S. unit Sprint Corp take a majority stake in T-Mobile from the latter’s parent Deutsche Telekom AG in the financial year starting April, added the sources. The deal, which media reports have said would be valued at about $20 billion – in line with the $21.6 billion SoftBank paid for Sprint this summer, would help the Tokyo-based company leapfrog U.S. rivals Verizon and AT&T Inc to become the world’s No.2 mobile carrier by revenue.
Sprint has been interested in combining with T-Mobile for years and top executives from both companies have said that consolidation was necessary in the U.S. wireless market, as cooperation in infrastructure and equipment orders would create a stronger rival against the two biggest players.
Both the U.S. Federal Communications Commission, which turned down AT&T’s application to acquire T-Mobile in 2011 due to competition concerns, and the Justice Department chiefs have signaled they will take a hard line in scrutinizing consolidation bids.
SoftBank may also face its second bidding war in barely a year with U.S. satellite TV provider Dish Network Corp, which is also looking at T-Mobile.
Dish dropped out of the race to acquire Sprint this year after forcing SoftBank to sweeten its offer.
While the German company would prefer a cash deal, SoftBank has considered a stock swap and may have also added a tender offer and other kinds of deals to its options,
SoftBank’s shares have rallied in recent weeks to their highest since the dot-com bubble burst more than a decade ago, as investors buy into Son’s aggressive acquisition and growth strategy. They include hedge fund manager Daniel Loeb, who disclosed last month that he had invested more than $1 billion in the company.