Japanese mobile carrier Softbank could announce as early as Monday a $20 billion deal for a 70 percent stake in US competitor Sprint Nextel, The Wall Street Journal reported.
The newspaper, citing informed sources, said Softbank would buy $8 billion of shares directly from Sprint and another $12 billion of shares in the market. The deal could vault Softbank among the top three mobile firms in the world.
The agreement would provide heavily indebted Sprint with liquidity to remain competitive in a field dominated by AT&T and Verizon Wireless, a joint venture between Verizon Communications Inc and Vodafone Group PLC.
Sprint Nextel confirmed Thursday it was talking with Softbank.
On Friday, Softbank also confirmed it was in talks to buy a controlling stake in Sprint, the third-biggest US carrier, but the move prompted Standard & Poor's to put the Japanese firm credit rating under review, saying it would heap pressure on its balance sheet.
Japan's Nikkei reported that Softbank was also eyeing fifth-ranked US carrier MetroPCS Communications at just a fraction of the Sprint price tag.
The Sprint acquisition could trigger a clash of the titans with Deutsche Telekom, after its US affiliate T-Mobile USA unveiled its own plan for a merger with MetroPCS in a deal that would boost the fourth-largest US wireless carrier's effort to compete in the fast-growing American market.
Deutsche Telekom will hold a 74 percent stake in the new company.
Some analysts say the Softbank offer for Sprint could be part of a more complex effort to acquire MetroPCS before the T-Mobile deal is consummated.
Softbank shares were down 4.80 percent at 2,280 yen in early Monday trade on the Tokyo Stock Exchange.