T-Mobile to acquire substantially all of U.S. Cellular in $4.4B transaction

T-Mobile (TMUS) and U.S. Cellular (USM) announced that T-Mobile has agreed to acquire substantially all of U.S. Cellular’s wireless operations. This includes U.S. Cellular’s wireless customers and stores, as well as certain specified spectrum assets. Additionally, UScellular customers will have the ability to fully participate in the Un-carrier’s plans. T-Mobile customers will also get access to U.S. Cellular’s network in areas that previously had limited coverage. T-Mobile will pay approximately $4.4B for the assets being acquired from U.S. Cellular in the transaction in a combination of cash and up to $2B of debt to be assumed by T-Mobile through an exchange offer to be made to certain U.S. Cellular debtholders prior to closing. To the extent any debtholders do not participate in the exchange, their bonds will continue as obligations of U.S. Cellular and the cash portion of the purchase price will be correspondingly increased. Following the closing of the transaction, U.S. Cellular will retain ownership of its other spectrum as well as its towers, with T-Mobile entering into a long-term arrangement to lease space on at least 2,100 additional towers being retained. T-Mobile does not expect the transaction to impact the company’s 2024 guidance or 2024 authorized shareholder return program. T-Mobile expects this transaction will yield approximately $1B in effective total opex and capex annual run rate cost synergies upon integration, with total cost to achieve the integration currently estimated at between $2.2B to $2.6B. The company plans to reinvest a portion of synergies toward enhancing consumer choice, quality and competition in the wireless industry. The transaction, which is subject to the satisfaction of customary closing conditions and receipt of certain regulatory approvals, is expected to close in mid-2025.