Japan’s SoftBank is in talks to acquire the American wireless carrier T-Mobile US and is discussing funding with financial institutions, sources close to the matter said on Wednesday.
SoftBank is looking to have its Sprint unit, which it acquired this summer for $21.6 billion, take a majority stake in T-Mobile from the latter’s parent, Germany’s Deutsche Telekom, in the financial year starting April, one of the sources added.
The deal, which media reports have said would be valued at about $20 billion, would help the Tokyo-based Softbank leapfrog its American rivals Verizon and AT&T to become the world’s No. 2 mobile carrier by revenue.
It would also bring SoftBank’s chief executive, Masayoshi Son, closer to his ambition of building the world’s biggest mobile Internet company, if he can overcome expected concerns from United States regulators about competition issues.
“More than the financial and funding aspects, there are likely concerns in the United States about how much Son, head of a foreign company, can really open up mobile infrastructure there, and whether the deal would obstruct healthy competition,†a banking source in Tokyo said.
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 American wireless market, as cooperation in infrastructure and equipment orders would create a stronger rival against the two biggest players.
Both the Federal Communications Commission, which turned down AT&T’s application to acquire T-Mobile in 2011 because of competition concerns, and the Justice Department have signaled that they would take a hard line in scrutinizing consolidation bids.
SoftBank may also face its second bidding war in barely a year with the American satellite-TV provider Dish Network, which is also looking at T-Mobile, sources told Reuters last week.
Dish dropped out of the race to acquire Sprint this year after forcing SoftBank to sweeten its offer.
SoftBank is in the final stages of talks with Deutsche Telekom, The Nikkei business newspaper reported on Wednesday, but sources told Reuters that talks were still in an early stage.
Deutsche Telekom would prefer a cash deal, but SoftBank has considered a stock swap and may have also added a tender offer and other kinds of deals to its options, The Nikkei report said.
Mr. Son has met with at least five banks to discuss financing, Bloomberg News reported over the weekend, including Credit Suisse, Mizuho Bank, Goldman Sachs and Deutsche Bank.
Steering SoftBank through the acquisition would be a test for the finance team, one banking source said, following the death in October of Kazuhiko Kasai, a former banker who was the company’s chief financial officer and considered Mr. Son’s right-hand man.
SoftBank shares dropped 0.5 percent to 8,770 yen on Wednesday, while T-Mobile shares closed up 1 percent at $32.19 on Tuesday. The stock markets in America were closed Wednesday for Christmas.
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 Mr. Son’s aggressive acquisition and growth strategy. They include hedge fund manager Daniel S. Loeb, who disclosed last month that he had invested more than $1 billion in the company.
