Key Takeaways
- T-Mobile announced an agreement Tuesday to acquire most of U.S. Cellular’s wireless operations for about $4.4 billion.
- The deal would give T-Mobile a larger footprint among more rural areas of the U.S.
- U.S. Cellular shares jumped soon after the opening bell.
Telecommunications giant T-Mobile (TMUS) announced Tuesday that it would acquire “substantially all” of U.S. Cellular’s (USM) wireless operations in a deal valued at $4.4 billion.
U.S. Cellular customers would receive access to T-Mobile’s expansive network across the country, while the U.S. Cellular network would also give T-Mobile’s existing customers better coverage in rural areas where service was previously weaker, the companies said Tuesday.
T-Mobile To Buy US Cellular’s Wireless Customers and Stores, Lease Cell Towers
T-Mobile agreed to purchase U.S Cellular’s customers and physical retail stores, along with “certain specified spectrum assets,” while the companies would also enter into an agreement for T-Mobile to lease some 2,100 cell towers.
“As customers from both companies will get more coverage and more capacity from our combined footprint, our competitors will be forced to keep up – and even more consumers will benefit,” T-Mobile Chief Executive Officer (CEO) Mike Sievert said in a statement.
U.S. Cellular customers would have the choice of keeping their current plan or switching to a T-Mobile plan.
Deal To Close by Mid-2025, No Impact on 2024 Guidance
T-Mobile said the companies expect the deal to close by the middle of next year, depending on regulatory approval. Since the deal likely would not be completed in the current fiscal year, T-Mobile said it is not shifting its 2024 guidance at this time.
The financing of the deal would include T-Mobile paying about $4.4 billion for U.S. Cellular’s customers and stores, including around $2 billion in debt.
U.S. Cellular shares jumped 9.5% to $47.12 soon after the opening bell Tuesday, while T-Mobile shares were little changed.