T-Mobile (TMUS.O) is set to acquire nearly all of United States Cellular’s (USM.N) wireless operations, including customers, stores, and 30% of its spectrum assets, in a deal valued at $4.4 billion. This strategic move has caused US Cellular’s shares to surge by over 10% in pre-market trading, coming almost ten months after the company announced it was exploring strategic options.
US Cellular will retain ownership of approximately 70% of its spectrum, its equity-method investments, and 4,400 telecom towers. T-Mobile will become a long-term tenant on at least 2,600 of these towers. The acquisition aims to enhance T-Mobile’s coverage for its customers and will be funded through a combination of cash and up to $2 billion in debt, which will be assumed via an exchange offer to some of US Cellular’s debtholders.
T-Mobile has assured that the deal will not impact its financial forecast or shareholder return program for 2024. The telecom giant anticipates around $1 billion in operating expense and capital spending cost synergies from the acquisition. The transaction is expected to close by mid-2025, pending regulatory approvals, with no action required from shareholders. Telephone and Data Systems (TDS.N), which holds an 83% stake in US Cellular, has already provided written consent for the deal.
In the event that the deal does not go through, T-Mobile will pay US Cellular a termination fee of $60 million, according to a filing by Telephone and Data Systems. Earlier this month, the Wall Street Journal reported that Verizon was also in talks to acquire parts of the regional carrier.
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