After years of back-and-forth negotiations and two failed merger attempts, wireless carriers Sprint and T-Mobile have entered into a definitive agreement to combine in a deal that the two companies claim will result in a $40 billion investment in the business and its next generation 5G .network.
The merger, which values Sprint at $26 billion and T-Mobile at $55 billion without debt, will combine the third and fourth largest wireless carriers in the U.S. and will position the company as a stronger competitor to the number one and number two carriers in the country, Verizon and AT&T.
T-Mobile's outspoken CEO John Legere, who first broke the news via twitter on Sunday afternoon, will lead the combined company which will retain the T-Mobile name.
The all-stock deal will position the new T-Mobile as a fierce wireless competitor to the two incumbent players, with an estimated 120 million subscribers.
The two companies said that together, T-Mobile "will be a force for positive change" in the U.S. wireless, video, and broadband industries. The company will focus on the buildout of a large-scale 5G network and create "thousands" of U.S. jobs.
"The combined company will have lower costs, greater economies of scale, and the resources to provide U.S. consumers and businesses with lower prices, better quality, unmatched value, and greater competition. The New T-Mobile will employ more people than both companies separately and create thousands of new American jobs," the two companies said in a statement.
Sprint and T-Mobile first discussed a merger in 2014 but ultimately dropped plans because of concerns around regulatory opposition from the then democrat-led Federal Communications Commission (FCC) under the Obama administration. The two companies tried to come together once again in 2017 under the now Republican-led FCC, but failed because of disagreement over ownership of a combined T-Mobile/Sprint entity.
Sprint, based in Overland Park, Kansas, is majority owned by Japanese parent company SoftBank Group. Belevue, Wash.-based T-Mobile is owned by German company Deutsche Telekom.
After the close of the deal, SoftBank Group Chairman and CEO Masayoshi Son, alongside Sprint's current CEO Marcelo Claure, will serve on the board of the new company.