T-Mobile and Sprint are closing in on a deal (TMUS, S)

Steve Marcus/Reuters

(Reuters) - T-Mobile US Inc is close to agreeing tentative terms on a deal to merge with peer Sprint Corp, people familiar with the matter said, a major breakthrough in efforts to merge the third and fourth largest U.S. wireless carriers.

Japan's SoftBank Group Corp, which controls Sprint, will own between 40 and 50 percent of the combined company, two of the sources said on Friday. T-Mobile owner Deutsche Telekom would own a majority stake in the merged company, the sources added.

Once the deal term sheet has been finalized, due diligence by the two companies will follow and a deal is expected by the end of October, though it is still possible that the talks may end unsuccessfully, the sources said.

The sources asked not to be identified because the negotiations are confidential.

Sprint declined to comment, while T-Mobile, SoftBank and Deutsche Telelok did not immediately respond to requests for comment. (Reporting by Greg Roumeliotis in New York and Arno Schuetze in Frankfurt; Additional reporting by Pamela Barbaglia in London and Douglas Busvine in Frankfurt; Writing by Douglas Busvine; Editing by Bernadette Baum)

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