Sprint has lined up eight banks to finance its proposed acquisition of T-Mobile US, edging closer to a deal that would merge the third- and fourth-biggest U.S. mobile operators, according to people familiar with the matter. The debt package exceeds $40 billion and includes a bridge loan of roughly $20 billion from Japan's Softbank to Sprint, as well as some $20 billion refinancing of T-Mobile's existing debt, the people said this week. Read More

Five global banks—JPMorgan Chase, Goldman Sachs, Deutsche Bank, Bank of America/Merrill Lynch, and Citigroup—have agreed to finance Sprint's proposal to acquire the smaller rival, the people said. Sprint, majority-owned by Softbank, has also tapped Japanese banks Mizuho Financial Group, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Financial Group, the people added.

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The companies will seek to finalize details of the financing in the coming month so they could announce a merger around August, said the people, who asked not to be identified because the matter is not public. Softbank and T-Mobile owner Deutsche Telekom have agreed to broad terms of a deal, under which Sprint would pay around $40 per share for T-Mobile, valuing the smaller rival at nearly $32 billion, Reuters and others reported earlier this month. Read More What a Sprint/T-Mobile deal could mean for prepaid plans

Deutsche Telekom stands to pay a breakup fee of roughly $1 billion if it tries to get out of the deal, while the so-called reverse breakup fee that Softbank would have to pay should regulators block the transaction is about $2 billion, one person said. Analysts see the regulatory challenge as the biggest hurdle facing the companies since both the U.S. Federal Communications Commission (FCC) and Department of Justice (DOJ) have expressed a desire to have at least two more network operators competing against the market leaders AT&T and Verizon.

JPMorgan, Bank of America, and Citi declined to comment while Goldman Sachs, Deutsche Bank, Mizuho, Bank of Tokyo-Mitsubishi, and Sumitomo Mitsui did not respond to requests for comment. Representatives of Sprint, Softbank, T-Mobile, and Deutsche Telekom also did not respond to requests for comment. Read More Who keeps Internet speed promises—and who doesn't

Three years ago, regulators rejected AT&T's agreed $39 billion bid for T-Mobile, which 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 assets. Under the proposed sale to Sprint, Deutsche Telekom is expected to keep a stake of 15 percent or more in the combined company, people familiar with the matter have said.