T-Mobile will acquire nearly all of United States Cellular’s wireless operations, including customers, stores, and 30% of its spectrum assets, in a deal valued at $4.4 billion, the telecom giant announced on Tuesday.
For years, T-Mobile has pursued high-profile acquisitions as a means of accelerating growth. This news comes almost ten months after U.S. Cellular revealed it was exploring strategic options. The company’s shares surged more than 10% in pre-market trading.
U.S. Cellular will retain ownership of about 70% of its spectrum, its equity-method investments, and 4,400 telecom towers. The company stated that T-Mobile will become a long-term tenant on at least 2,600 of these towers.
T-Mobile, aiming to enhance its customer coverage, will fund the acquisition with a combination of cash and up to $2 billion in debt to be assumed through an exchange offer to some of U.S. Cellular’s debtholders. “By tapping into the additional capacity and coverage created through the combined spectrum and wireless assets, T-Mobile will spur competition,” T-Mobile said in a statement.
T-Mobile does not anticipate any impact on its financial forecast or shareholder return program for 2024. The company expects to achieve around $1 billion in operating expense and capital spending cost synergies.
The deal is projected to close in mid-2025 following regulatory approvals, with no action required from U.S. Cellular shareholders. Telephone and Data Systems, which holds an 83% stake in the regional carrier, has provided written consent for the transaction.
Earlier this month, the WSJ reported that Verizon was also in discussions to acquire parts of the regional carrier.
