Sprint Corp has agreed to pay about $40 per share to purchase T-Mobile US, according to Reuters, citing a person familiar with the matter.

The deal would merge the third and fourth-biggest mobile network operators in the U.S.

The $40 price represents a 17 percent premium to T-Mobile US's closing share price on June 4, giving the company a valuation of approximately $32 billion.

The shares have more than doubled in price since the company purchased MetroPCS in 2013.

Deutsche Telekom shares increased 1.4 percent at 12.60 euros earlier today, May 5, valuing the German company at over 56 billion euros, or $76 billion.

JP Morgan analyst Hannes Wittig said the $40 price seemed low however, according to Reuters.

"T-Mobile US should be worth more than that given that the synergies should exceed $20 billion, Deutsche Telekom would share some of the execution risk and Sprint would be getting control ... Somewhere in the high 40s would be more appropriate," Wittig said.

Japan's Softbank 9984.T, which owns Sprint, and Deutsche Telekom DTEGn.DE, which owns 67 percent of T-Mobile, still have to negotiate the details of the deal, according to Reuters.

Negotiations includes the termination fee and financing to be paid if the merger gets blocked by regulators.

The regulatory challenge is considered the biggest hurdle facing the companies since both the Department of Justice (DOJ) and the U.S. Federal Communications Commission (FCC) have expressed the desire to have at least two more network operators competing against market leaders AT&T and Verizon.

In 2011, regulators rejected AT&T's agreed $39 billion bid for T-Mobile US. This resulted in AT&T paying Deutsche Telekom as T-Mobile's full owner a reverse break-up fee of $6 billion in cash and U.S. mobile assts.

Officials at Sprint, Softbank and Deutsche Telekom have declined to comment on the deal, according to Reuters.

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