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T-Mobile US (TMUS) - Get T-Mobile US Inc. Report agreed Sunday to merger terms with Sprint Corp (S) - Get SentinelOne Inc. Class A Report  in a $26.5 billion deal that will create the country's third-largest wireless carrier.

Sprint and T-Mobile will execute the all stock deal based on Friday's closing prices of $6.50 and $64.52 respectively, the companies said, with 0.10256 T-Mobile shares for each Sprint share, which translates to the equivalent of 9.75 Sprint shares for each T-Mobile US share. The ratio values Sprint at $6.62 each. The combined group, which has an estimated enterprise value of $146 billion, will be named T-Mobile, the companies said, with headquarters in Bellevue, Wash. and Overland Park, Kansas. T-Mobile US CEO John Legere will head the combined group.

"This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience - and do it all so much faster than either company could on its own," Legere said. "As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf."

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Sprint shares closed at $6.50 each, giving it a market cap of $ while T-Mobile shares closed at $64.52, indicating a market value of $54.77 billion.

The combined group will have around 127 million customers in the U.S. and sit just behind AT&T (T) - Get AT&T Inc. Report and Verizon Communications (VZ) - Get Verizon Communications Inc. Report as the nation's third-largest carrer. 

Base on ownership stakes of each company's parent, German carrier Deutsche Telekom AG (DTEGY)  will hold around 42% of the combined group while Japan's SoftBank (SFTBY) will received 27%.

"The combination of spectrum holdings, resulting network scale, and expected run rate cost synergies of $6+ billion, representing a net present value (NPV) of $43+ billion will supercharge T-Mobile's Un-carrier strategy to disrupt the marketplace and lay the foundation for U.S. companies and innovators to lead in the 5G era," Sprint said in a statement.