Key Points:
- T-Mobile is set to acquire most of U.S. Cellular, including stores, spectrum assets, and customers, for $4.4 billion.
- The deal involves cash and up to $2 billion in debt, with $100 million contingent on meeting specific metrics.
- T-Mobile will acquire 30% of U.S. Cellular’s spectrum to improve rural coverage and connectivity. Customers can keep their current plans or switch to T-Mobile.
- U.S. Cellular will retain 70% of its spectrum and towers, leasing additional towers to T-Mobile.
Shares of U.S. Cellular surged nearly 6% on Tuesday following the announcement that T-Mobile plans to acquire most of the company. The deal, valued at $4.4 billion, includes U.S. Cellular’s stores, a significant portion of its spectrum assets, and customer base. This strategic acquisition aims to enhance T-Mobile’s coverage, particularly in rural areas, and expand its customer offerings.
According to a press release from T-Mobile, the transaction will be funded through cash and up to $2 billion in debt. As stated in a separate release from U.S. Cellular, an additional $100 million of the cash portion is contingent on specific financial and operational metrics being met between the signing and closing of the deal. Following the news, T-Mobile’s shares rose more than 1% during Tuesday’s trading session.
The agreement stipulates that T-Mobile will acquire approximately 30% of U.S. Cellular’s wireless spectrum. This acquisition is intended to bolster T-Mobile’s coverage in rural areas, providing better connectivity to U.S. Cellular’s customers across the United States. Both companies confirmed that U.S. Cellular customers can retain their current plans or transition to a T-Mobile plan.
U.S. Cellular will retain 70% of its wireless spectrum and towers despite the acquisition. Additionally, U.S. Cellular will lease space on at least 2,100 more towers to T-Mobile. The deal also allows T-Mobile to secure new long-term leases on at least 2,015 towers owned by U.S. Cellular and extend existing leases on about 600 other towers. U.S. Cellular emphasized that this arrangement would provide its customers with a “strong anchor tenant” for at least 15 years following the deal’s completion.
This acquisition follows T-Mobile’s $1.35 billion purchase of Ka’ena, the parent company of Mint Mobile, which received approval from the U.S. Federal Communications Commission in April. Additionally, T-Mobile’s significant $26 billion merger with Sprint in 2020 marked a major consolidation in the telecommunications industry.
