Sprint (S) parent SoftBank Group (SFTBY) is planning to approach T-Mobile US (TMUS) about a merger between the two telecom giants and is willing to give up control over a combined entity, Reuters reported Friday, citing sources familiar with the matter.
Shares of Sprint closed up 3.3% to $9.30 on Friday on the news, while T-Mobile stock rose 5.5% to $63.92.
SoftBank hasn't yet met with Deutsche Telekom, the owner of T-Mobile US, about a possible tie-up with Sprint because Federal Trade Commission rules bar collusion between telecommunications companies during government auctions for wireless spectrum licenses, Reuters noted.
The auction is in its final stages and is expected to end in early March, at which time, analysts have said there could be some major consolidation in the telecom space. President Donald Trump's administration is also considered likely to take a more lenient stance on M&A.
SoftBank CEO Masayoshi Son met with Trump in December and pledged to invest $50 billion in U.S. businesses, along with a plan to create 50,000 jobs.
SoftBank, which owns about 83% of Sprint, first attempted to acquire T-Mobile in 2014 but abandoned those efforts after experiencing pushback from U.S. regulators. AT&T (T) also was forced to abandon a $39 billion T-Mobile deal in 2011 as a result of pressure from the Obama administration.
In August, SoftBank said it would make another run at T-Mobile if it seemed like the new administration would be open to consolidation, according to Bloomberg.
Deutsche Telekom CEO Tim Hötgges, however, has said the company doesn't want to give up T-Mobile, Reuters reported. As a result, Softbank has reportedly said it is willing to give up control of a combined entity to Deutsche Telekom in order to get a deal done.