T-Mobile announced it will acquire nearly all of United States Cellular‘s wireless operations, including customers, stores, and 30% of its spectrum assets, in a transaction valued at $4.4 billion. U.S. Cellular’s stock surged over 10% in pre-market trading following this announcement, which comes almost ten months after the company indicated it was considering strategic alternatives.
U.S. Cellular will keep about 70% of its spectrum, equity-method investments, and 4,400 telecom towers. T-Mobile will become a long-term tenant on at least 2,600 of these towers. To fund the deal, T-Mobile will use a combination of cash and up to $2 billion in debt, which will be assumed through an exchange offer to some of U.S. Cellular’s debtholders.
T-Mobile does not foresee any impact on its financial forecast or shareholder return program for 2024 and anticipates $1 billion in operating expense and capital spending cost synergies. The deal is expected to close in mid-2025, pending regulatory approvals, and U.S. Cellular stated that shareholders are not required to take any action regarding this deal. Telephone and Data Systems, which owns 83% of U.S. Cellular, has given written consent for the deal.
Earlier this month, WSJ reported that Verizon was also in talks to acquire parts of U.S. Cellular.
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