Sprint has agreed to acquire T-Mobile for around $40 a share in a deal valued at around $32 billion, according to The Wall Street Journal. The acquisition could happen early this summer.

On broad terms the deal would be roughly 50% cash and 50% stock, WSJ's sources said, and Germany's Deutsche Telekom AG, which is T-Mobile's largest shareholder, would retain a stake of 15% to 20% in the new company.

There's still no official confirmation from either company. They're said to be working toward a formal contract but the deal could still fall apart, the report warns. If indeed a deal is announced, it is likely to face intense scrutiny from regulators as the merger would combine the country's third- and fourth-largest wireless operators, reducing the number of US wireless carriers from three.

The deal would require the approval of the Federal Communications Commission and the Justice Department.

Nevertheless Sprint is apparently optimist about regulatory approval. The new spectrum-auction rules aren't as friendly to smaller carriers and the company could use this to argue in favor of the deal. Moreover Jessica Rosenworcel, a Democratic commissioner at the FCC, has already said that she would keep an open mind when considering a transaction.

Sprint could also argue that Verizon and AT&T are so much bigger than their rivals that the merger would actually take the country from two real competitors to three, not to three from four.

The news comes as regulators are already weighing two other high profile deals including Comcast-TWC and AT&T-DirecTV. All three have the potential to reshape the communications business, and the government will also have to take their combined effects into account.