Sprint and T-Mobile are setting terms for a merger. The two phone giants are still working out the capital structure and details, but thus far, the break up fee is set at above $1 billion and the purchase price would come in at around $40 per share, according to a report from Bloomberg.

Sprint will offer 50 percent stock and 50 percent cash for T-Mobile, which would leave parent company Deutsche Telekom AG with a 15 percent holding in the combined company. 

The official terms of the agreement are set to come out in July, but many details, including the management structure of the new company, still need to be finalized.