T-Mobile to acquire most of U.S. Cellular for $4.4B
Add Axios as your preferred source to
see more of our stories on Google.
A T-Mobile store in New York. Photo: Yuki Iwamura/Bloomberg via Getty Images
T-Mobile has agreed to buy U.S. Cellular's wireless operations and select spectrum assets for $4.4 billion, the companies announced on Tuesday.
Why it matters: The deal ushers in more telecom consolidation and strengthens T-Mobile's position after having already combined with Mint Mobile parent Ka'ena and Sprint.
Zoom in: T-Mobile said the deal includes "substantially all" of U.S. Cellular's wireless operations, along with its customers and stores. U.S. Cellular customers will gain access to T-Mobile's 5G network and its plans.
- The $4.4 billion purchase price is a combination of cash and up to $2 billion of assumed debt, according to the press release.
- The boards of U.S. Cellular and its parent company, Telephone and Data Systems, Inc. (TDS), approved the deal. It is expected to close in mid-2025, subject to regulatory approvals.
Zoom out: U.S. Cellular will retain about 4,400 owned towers and approximately 70% of its spectrum portfolio and will look for ways to monetize those remaining assets, the company said in its press release.
- U.S. Cellular said it retains equity method investments that include its wireless partnerships.
- T-Mobile also will extend its leases for about 600 U.S. Cellular towers and sign a new agreement for a minimum of 2,015 more.
What they're saying: "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 CEO Mike Sievert said in a statement.
- "The transaction provides our customers access to better coverage and speeds, as well as unlimited texting in more than 215 countries, content offers, device upgrades and other T-Mobile benefits," U.S. Cellular CEO Laurent Therivel said in a statement.
What we're watching: Therivel said on a conference call that the deal will lower prices and improve the network, adding that T-Mobile has committed to hiring a "significant number" of U.S. Cellular associates.
- Therivel dismissed speculation about other transactions. The Wall Street Journal reported earlier this month that Verizon was also interested in U.S. Cellular.
- "We'll continue to evaluate what the best outcome is for our shareholders," Therivel said on the call. "But at least right now there ... are no incremental changes to the portfolio that we have planned."
Citigroup served as lead financial adviser, Centerview Partners as financial adviser and Sidley Austin as lead legal adviser to TDS. TD Securities and Wells Fargo also served as financial advisers to TDS.
- PJT Partners served as financial adviser and Cravath, Swaine & Moore served as legal adviser to the independent directors of U.S. Cellular.
- Clifford Chance and Wilkinson Barker Knauer served as legal regulatory advisers to U.S. Cellular and TDS.
- Cleary Gottlieb Steen & Hamilton and DLA Piper served as legal counsel to T-Mobile.
