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 development follows U.S. Cellular’s strategic review initiated nearly ten months ago, causing its shares to surge over 10% in pre-market trading. U.S. Cellular will maintain ownership of about 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.
T-Mobile aims to enhance its coverage through this acquisition. The deal will be financed through a combination of cash and up to $2 billion of debt, to be assumed via an exchange offer to some of U.S. Cellular’s debtholders.
T-Mobile stated that this acquisition would not affect its financial forecast or shareholder return program for 2024. The company anticipates approximately $1 billion in synergies from operating expenses and capital spending. The transaction is expected to close in mid-2025, pending regulatory approvals, and shareholder action is not required for this deal.
Telephone and Data Systems, which holds an 83% stake in the U.S. Cellular, has provided written consent approving the acquisition.
Earlier this month, The Wall Street Journal reported that Verizon (NYSE:VZ) was also in discussions to acquire parts of the U.S. Cellular.
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