By Maki Shiraki and Nobuhiro Kubo
TOKYO (Reuters) - Japan's SoftBank Corp <9984.T> is in talks to acquire U.S. wireless carrier T-Mobile US Inc and is discussing funding for a deal with financial institutions, sources close to the matter said on Wednesday.
SoftBank is looking to have its recently acquired U.S. unit Sprint Corp take a majority stake in T-Mobile from the latter's parent Deutsche Telekom AG in the financial year starting April, one of the sources added.
The deal, which media reports have said would be valued at about $20 billion - in line with the $21.6 billion SoftBank paid for Sprint this summer, would help the Tokyo-based company leapfrog U.S. rivals Verizon and AT&T Inc to become the world's No.2 mobile carrier by revenue.
It would also bring SoftBank CEO Masayoshi Son closer to his ambition of building the world's biggest mobile Internet company - if he can overcome U.S. regulators' expected concerns about competition issues.
"More than the financial and funding aspects, there are likely concerns in the United States about how much Son, head of a foreign company, can really open up mobile infrastructure there, and whether the deal would obstruct healthy competition," a banking source in Tokyo said.
Sprint has been interested in combining with T-Mobile for years and top executives from both companies have said that consolidation was necessary in the U.S. wireless market, as cooperation in infrastructure and equipment orders would create a stronger rival against the two biggest players.
Both the U.S. Federal Communications Commission, which turned down AT&T's application to acquire T-Mobile in 2011 due to competition concerns, and the Justice Department chiefs have signalled they will take a hard line in scrutinising consolidation bids.
SoftBank may also face its second bidding war in barely a year with U.S. satellite TV provider Dish Network Corp , which is also looking at T-Mobile, sources told Reuters last week.
Dish dropped out of the race to acquire Sprint this year after forcing SoftBank to sweeten its offer.
SoftBank is in the final stages of talks with Deutsche Telekom, the Nikkei business daily reported on Wednesday, but sources told Reuters that talks were still in an early stage.
While the German company would prefer a cash deal, SoftBank has considered a stock swap and may have also added a tender offer and other kinds of deals to its options, the Nikkei report said.
Son has met with at least five banks to discuss financing, Bloomberg news reported over the weekend, including Credit Suisse Group AG , Mizuho Bank Ltd, Goldman Sachs Group Inc and Deutsche Bank AG .
Steering SoftBank through the acquisition would be a test for the finance team, one banking source said, following the death in October of Kazuhiko Kasai, a former banker who was the company's CFO and considered Son's right-hand man.
SoftBank shares dropped 0.5 percent to 8,770 yen on Wednesday, while T-Mobile shares closed up 1 percent at $32.19 on Tuesday.
SoftBank's shares have rallied in recent weeks to their highest since the dot-com bubble burst more than a decade ago, as investors buy into Son's aggressive acquisition and growth strategy. They include hedge fund manager Daniel Loeb, who disclosed last month that he had invested more than $1 billion in the company.
(Additional reporting by Emi Emoto, Taro Fuse and Sophie Knight in Tokyo, Liana B. Baker in New York; Editing by Edmund Klamann and Himani Sarkar)