Under one possible scenario, a new holding company would make an all-share offer for both firms. It would be owned by existing shareholders and list in both the U.S. and Europe, the person said.
Such a structure would mirror the $80 billion merger between German gas supplier Linde and U.S. rival Praxair, analysts at MKI Global Partners said in a note.
Any capital raise would require support from 75% of Deutsche Telekom shareholders and cannot happen without sign-off from Berlin, said Thomas Nienaber of MKI Global Partners. Between the German Ministry of Finance and government-owned KfW, the state controls 28.3%.
He added that T-Mobile US shareholders may have little incentive to swap shares into a German-U.S. company at a low premium.