T-Mobile (TMUS.O) announced on Tuesday that it will acquire nearly all of regional carrier United States Cellular’s (USM.N) wireless operations, including its customers, stores, and 30% of its spectrum assets, in a deal valued at $4.4 billion. Following the announcement, U.S. Cellular’s shares surged over 10% in pre-market trading, nearly ten months after the company revealed it was exploring strategic options.
U.S. Cellular will retain about 70% of its spectrum, its equity-method investments, and 4,400 telecom towers. It also stated that T-Mobile will become a long-term tenant on at least 2,600 of these towers. T-Mobile aims to enhance its coverage for customers and will finance the acquisition with 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 expects the deal to have no impact on its financial forecast or shareholder return program for 2024 and anticipates realizing approximately $1 billion in operating expense and capital spending cost synergies. The transaction is expected to close in mid-2025, pending regulatory approvals, and does not require shareholder action, according to U.S. Cellular. Telephone and Data Systems (TDS.N), which holds an 83% stake in U.S. Cellular, has provided written consent approving the deal.
If the deal falls through, T-Mobile will pay U.S. Cellular a termination fee of $60 million, as stated in a filing by Telephone and Data Systems.
