T-Mobile to Acquire United States Cellular in $4.4 Billion Deal
In a significant move, T-Mobile, a global telecommunications company, has announced its plans to acquire United States Cellular, a regional carrier. The acquisition, valued at $4.4 billion, will see T-Mobile taking over nearly all of United States Cellular’s cellular operations.
The deal will include the transfer of subscribers, stores, and 30% of the spectrum assets owned by United States Cellular. This strategic move aims to strengthen T-Mobile’s market position and expand its coverage across the United States.
The announcement of this acquisition comes after United States Cellular revealed its exploration of other strategic alternatives almost 10 months ago. It was a response to various opportunities that the company wanted to explore.
Despite the acquisition, United States Cellular will retain control over approximately 70% of its spectrum holdings, as well as its equity-method investments and 4,400 telecom towers. T-Mobile will become a tenant in at least 2,600 towers, providing long-term benefits for both parties.
To finance the acquisition, T-Mobile plans to assume up to $2 billion in debt through an exchange offer to certain debtholders associated with United States Cellular. This combination of cash and debt will ensure a smooth transition of ownership.
T-Mobile’s primary objective with this acquisition is to enhance its coverage and services for customers. By expanding its network reach, T-Mobile aims to provide a better experience and meet the growing demands of consumers.
It is expected that there will be minimal changes to T-Mobile’s financial outlook or shareholder return program following the acquisition. The company remains focused on delivering value to shareholders and maintaining a strong financial position.
Furthermore, the transaction is subject to regulatory clearances, which are anticipated to be obtained by mid-2025. United States Cellular has expressed confidence that shareholders will not take any action against the transaction, indicating their support for the deal.
The approval of T-Mobile Telephone and Data Systems, which holds an 83% ownership stake in United States Cellular, has significantly increased the likelihood of the transaction being approved. This endorsement has facilitated the process and streamlined the sale.
In a recent article, it was revealed that Verizon had also been in negotiations to acquire United States Cellular’s assets. However, T-Mobile emerged as the preferred buyer, securing its position as a dominant player in the telecommunications industry.
Overall, this acquisition positions T-Mobile for future growth and strengthens its competitive advantage in the market. With an extended coverage network and enhanced resources, T-Mobile is poised to deliver exceptional services to its customers and drive innovation in the telecommunications industry.