T-Mobile (NASDAQ:TMUS) announced on Tuesday its acquisition of nearly all of U.S. Cellular’s wireless operations, including customers, stores, and 30% of its spectrum assets, in a deal valued at $4.4 billion.
This move comes nearly ten months after U.S. Cellular began exploring strategic options. The news caused U.S. Cellular’s shares to jump over 10% in pre-market trading.
U.S. Cellular will retain ownership of approximately 70% of its spectrum, its equity-method investments, and 4,400 telecom towers. Additionally, T-Mobile will become a long-term tenant on at least 2,600 of these towers.
To enhance its coverage, T-Mobile will finance the acquisition through a combination of cash and up to $2 billion in debt, to be assumed via an exchange offer to some of U.S. Cellular’s debtholders.
T-Mobile stated that the deal would not affect its financial forecast or shareholder return program for 2024. The company expects around $1 billion in synergies from operating expenses and capital spending. The transaction is anticipated to close in mid-2025, pending regulatory approvals, with no shareholder action required.
Telephone and Data Systems, which holds an 83% stake in U.S. Cellular, has provided written consent approving the acquisition.
The Wall Street Journal recently reported that Verizon (NYSE:VS) was also in discussions to acquire parts of U.S. Cellular.
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