By Reuters | Updated: May 29, 2024
May 28 (Reuters) – T-Mobile (TMUS.O) will buy almost all of regional carrier United States Cellular’s (USM.N) 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.
U.S. 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.
U.S. 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 U.S. Cellular’s debtholders.
T-Mobile does not expect any impact on its financial forecast or shareholder return program for 2024. It expects an 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, U.S. Cellular said.
It added that Telephone and Data Systems (TDS.N) which is a 83% shareholder of the regional carrier, has provided written consent approving the deal.
If the deal fails to go through, T-Mobile will pay U.S. Cellular a termination fee of $60 million, Telephone and Data Systems said in a filing.
Verizon was in talks to also buy parts of the regional carrier, the Wall Street Journal reported earlier this month.
@ Thomson Reuters 2024
