Sprint and T-Mobile have come to an agreement over key terms of their long-rumored merger, according to reports citing sources close to the companies. The parent companies of both wireless carriers, SoftBank and Deutsche Telekom, still have details to discuss. But Sprint reportedly has agreed to pay T-Mobile $32 billion, a valuation equivalent to $40 per share, which some analysts say is low for such a large company.

U.S. regulators are expected to scrutinize any potential deal merging the nation's third- and fourth-largest wireless carriers Sprint's owner, SoftBank, has been trying to win over Americans concerned about a lessening of competition by promising to wage a price war if the merger takes place.

Terms of the Deal

Sources close to SoftBank have told The Wall Street Journal that the acquisition could take place as soon as this summer. Sprint is taking risks in pursuing a merger with T-Mobile but the payoff could be substantial if regulators accept the deal. Sprint has gone so far as to offer T-Mobile $1 billion in cash and assets if the deal doesn't go through, sources say.

The acquisition price of $32 billion places a 17 percent premium on T-Mobile's current worth, based upon the company's closing share value Wednesday. Any potential merger between the carriers would be complicated by the existence of larger parent companies that own different percentages of each carrier.

Deutsche Telekom currently owns 67 percent of T-Mobile but its control over the company could diminish substantially as it may only be left with a 15 percent to 20 percent stake in the combined carrier. Deutsche Telekom would not necessarily fight a merger, however, because it could potentially receive billions in the deal.

Getting Through Regulators

Even if T-Mobile and Sprint were enthusiastically pursuing a merger, there is a strong possibility U.S. regulators would shoot down the deal. SoftBank CEO Masayoshi Son has been pursuing a merger deal for months, as it would give Sprint the tools to legitimately compete with AT&T and Verizon Wireless.

The Federal Communications Commission and Justice Department have both raised concerns about mergers among any of the top four U.S. carriers. AT&T attempted a $39 billion takeover of T-Mobile in 2011 but regulators refused to accept that deal. Since this deal is between the third- and fourth-place carriers, regulators may respond differently.

How regulators respond to a proposed merger between Sprint and T-Mobile will largely depend on whether Sprint and SoftBank can make the argument that competition will grow because of it. While there would be fewer carriers to choose from, SoftBank has already made the argument that a merger would result in more competition because Sprint would be a strong competitor to AT&T and Verizon.