Deutsche Telekom will hold 42 percent of the combined T-Mobile USA-Sprint business after the two companies agreed the terms of a tie-up.
The Germany-based operator has agreed a deal with Sprint owner Softbank that values the newly combined entity, which will be known as T-Mobile USA, at $150 billion.
Japan-based Softbank will hold a 27 percent stake in the new business, with the terms of the deal seeing T-Mobile USA taking over all Sprint shares in a stock swap that values 9.75 Sprint shares for every T-Mobile USA share.
The remaining 31 percent of the business will be held by other shareholders on the stock market.
The deal, should it get regulatory approval, is expected to close in the first half of 2019.
Deutsche Telekom CEO Timotheus Höttges will chair the new company, which will have around 127 million customers and revenue of $76 billion.
Masayoshi Son, current SoftBank Group Chairman and CEO, and Marcelo Claure, current CEO of Sprint, will also serve on the board.
Current T-Mobile USA Chief Executive John Legere will lead the new company.
The remaining leadership positions as well as the future of brands including Sprint, MetroPCS, Boost Mobile and Virgin Mobile is yet to be decided.
In a statement, Deutsche Telekom claimed the new business would be “on a level” with rivals AT&T and Verizon.
Synergies of around $43 billion are expected as a result of opex and capex savings, it added.
The two mobile operators’ existing networks will be combined, and the new company promised to build a nationwide 5G network.
It said it would look to offer converged fixed and mobile services, similar to what it does in Europe, and expand its network deeper in America’s rural heartlands to reach 60 million more people.
Further, the new company would employ more staff than the two previous companies put together thanks to additional call centres and retail stores.
Höttges said: "This is an exceptional deal, which will strengthen Deutsche Telekom's presence in the leading markets in the Western World.
"No other company in the industry is represented as strongly in both the USA and Europe as we are.
“Ninety percent of our revenue comes from countries with particularly strong economic conditions.
“Deutsche Telekom benefits from growth on both sides of the Atlantic."