T-Mobile to buy US Cellular's wireless operations in $4.4 billion deal
Technology
T-Mobile to buy US Cellular's wireless operations in $4.4 billion deal
(Reuters) - T-Mobile will buy almost all of regional carrier United States Cellular's wireless operations including customers, stores, and 30% of its spectrum assets in a deal valued at $4.4 billion, the telecom giant said on Tuesday.
US Cellular's shares jumped more than 10% in trading before the bell and comes nearly ten months after the company said it was exploring strategic options.
US Cellular will retain ownership of about 70% of its spectrum, its equity-method investments as well as 4,400 telecom towers. It said T-Mobile will become a long-term tenant on at least at least 2,600 towers.
T-Mobile, which eyes improved coverage for its customers, will fund the deal in a combination of cash and up to $2 billion of debt to be assumed through an exchange offer to be made to some of US Cellular's debtholders.
T-Mobile does not expect any impact on its financial forecast or shareholder return program for 2024. It expects a yield of about $1 billion in operating expense and capital spending cost synergies.
The deal is expected to close in mid-2025 after regulatory approvals, and shareholders are not expected to act on this deal, US Cellular said.
It added that Telephone and Data Systems, which is an 83% shareholder of the regional carrier, has provided written consent approving the deal.
Verizon was in talks to also buy parts of the regional carrier, WSJ reported earlier this month.
