Sprint Corp. (NYSE: S) shares surged by 18 percent late Tuesday afternoon after The Wall Street Journal reported that merger talks with T-Mobile US Inc. (NASDAQ: TMUS) restarted. T-Mobile shares rose by 6 percent.
The two telecommunication providers have met three times in the past four years regarding merger talks. The latest talks are in preliminary stages, the sources told WSJ.
Merger talks between the two are complicated because of the two companies’ ownerships. SoftBank Group Corp. owns nearly 85 percent of Sprint, while Deutsche Telekom AG controls majority of T-Mobile.
If the two merge, the combined company would have nearly 100 million customers, putting it ahead of AT&T (NYSE: T) and its 93 million subscribers in the U.S in 2017, and just behind Verizon Communications (NYSE: VZ) of 116 million.
AT&T shares rose by 2.7 percent. Verizon shares jumped by 3.6 percent.
The rekindled talks come after the U.S. government blocked AT&T’s acquisition attempt for Time Warner. Regulators blocked the deal saying that the two combined companies would dominate the media industry, providing less to consumers.
The talks between Sprint and T-Mobile could possibly end up the same way as AT&T’s takeover attempt. Sprint and T-Mobile are third and fourth largest U.S. cellular service providers, respectively.
The merger talks shines light on the Obama administration’s stance on top providers merging. The administration said that the four providers should remain as individuals to offer more choices and lower prices for consumers, reported WSJ.
Sprint and AT&T did not respond to comments on the matter.