Sprint and T-Mobile have agreed to merge in a deal worth $32 billion, according to multiple news sources.
Sprint, which is owned by Tokyo-based Softbank, will offer about $40 per share, combining the country's fourth- and fifth-largest wireless providers.
The Wall Street Journal noted that the deal would face strong opposition from regulators, who opposed a previous merger attempt between T-Mobile and AT&T.
But if the deal falls through, Spring will pay T-Mobile $1 billion in cash and other assets, according to the Wall Street Journal.
The deal could happen as soon as this summer, though the onetime rivals have yet to conduct due diligence or seek financing.
Bonn, Germany-based Deutsche Telecom, majority owner of T-Mobile, would own about one-fifth of the combined entity, down from a two-thirds ownership stake in T-Mobile currently.
The combined company would be better equipped to battle rivals AT&T and Verizon. It is unclear who would run the new company, or what the effect would be for subscribers to both plans.
If no deal is reached by August, the sides could hold off on further negotiations for several years until a new U.S. presidential administration takes over, Bloomberg reported.
The New York Times, Wall Street Journal and Bloomberg News contributed to this article.