Report: Sprint in talks to buy T-Mobile

Sprint Nextel has discussed purchasing T-Mobile USA from Deutsche Telekom AG, according to report from Bloomberg.

The deal would combine the third and fourth largest wireless carriers in the U.S., creating a significant competitor to market leaders Verizon and AT&T. Sources told Bloomberg the talks are preliminary, and no deal is imminent.

According to the report, both firms haven't been able to agree on a valuation for T-Mobile. Deutsche Telekom would retain a significant stake in the combined entity.

Sprint shares rose more than 7 percent on news of the talks and remain up more than 6 percent as of Tuesday afternoon.