(Bloomberg) — T-Mobile US Inc., the second-largest mobile carrier in the US, has agreed to buy US Cellular Corp.’s wireless operations and some of its spectrum assets for roughly $2.4 billion.
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The purchase price of $4.4 billion includes a combination of cash and as much as $2 billion in assumed debt, the companies said in a statement on Tuesday. The deal includes US Cellular’s wireless customers, retail stores and 30% of its spectrum assets. The transaction is expected to close in mid-2025, pending regulatory approvals.
Shares of T-Mobile were little changed in early trading. US Cellular shares were up 2.4% before the market open.
T-Mobile, alongside virtually all of its telecom rivals, has been facing intensifying competition for new business in a saturated wireless market. Meanwhile, it’s going head-to-head with cable providers offering bundled phone products to their video subscribers.
Despite that, T-Mobile has grown faster than peers by cashing in on a lead in fast 5G airwaves, adding more rural territories to its coverage area and selling wireless internet access in places where broadband choices are few.
T-Mobile expects to finance the US Cellular deal with existing cash. The company said it plans to offer to swap $2 billion of US Cellular debt for T-Mobile debt.
In April, the Bellevue, Washington-based company reported quarterly earnings that beat analysts’ expectations and added more wireless phone subscribers than Wall Street had projected.
Also in April, T-Mobile won US approval to buy Mint Mobile, the budget wireless provider partly owned by actor Ryan Reynolds. The company had proposed to acquire Mint’s closely held parent company, Ka’ena Corp., with a combination of 39% cash and 61% stock in March 2023 in a deal valued at as much as $1.35 billion.
The Wall Street Journal reported earlier this month that Verizon and T-Mobile were in talks to buy portions of US Cellular, a carrier with more than 4 million wireless subscribers in 21 states and a market value of $3.86 billion.
Two weeks ago, Verizon Communications Inc.’s consumer chief, Sowmyanarayan Sampath, said the company wanted to buy back US Cellular’s stake in its Los Angeles business if the companies could agree on a reasonable price. Verizon had long been eager to buy back the share, he said.
Following the closure of the deal, US Cellular will retain one of the largest tower businesses in the US, 70% of its spectrum portfolio and significant investment interests, including its wireless partnerships.
(Adds pre-market share price and additional details beginning in the second paragraph.)
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