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T-Mobile to purchase majority of U.S. Cellular in $4.4 billion agreement; U.S. Cellular stocks soar.

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An illustration photo taken in Krakow, Poland, featuring the T-Mobile logo on a laptop screen and a smartphone on Feb. 22, 2024.

Jakub Porzycki | Nurphoto | Getty Images

The stock of U.S. Cellular surged by 6% on Tuesday following the announcement by T-Mobile of its intention to acquire a significant portion of the company, including its stores, select spectrum assets, and customer base in a transaction valued at $4.4 billion.

As per the details shared in a press release by T-Mobile, the agreement comprises a cash component and up to $2 billion in debt. An additional $100 million of the cash segment is contingent on achieving specific financial and operational targets between the signing and completion of the deal, according to a separate statement released by U.S. Cellular.

T-Mobile’s shares saw an increase of over 1% during Tuesday’s trading session.

Under the terms of the deal, T-Mobile is set to obtain around 30% of U.S. Cellular’s wireless spectrum. This acquisition is aimed at enhancing coverage in rural areas and providing improved connectivity to U.S. Cellular’s customers across the nation, the two companies disclosed. Furthermore, U.S. Cellular customers will have the option to retain their existing plans or migrate to a T-Mobile service plan.

Both companies confirmed that U.S. Cellular will retain 70% of its wireless spectrum and towers, leasing space on a minimum of 2,100 additional towers to T-Mobile. Additionally, T-Mobile will secure new long-term leases for at least 2,015 towers owned by U.S. Cellular and extend existing leases for approximately 600 others, as stated by U.S. Cellular in its release.

This arrangement is intended to provide U.S. Cellular customers with a “solid anchor tenant” for at least 15 years post the completion of the transaction, the company specified.

The latest development comes after T-Mobile’s acquisition of Ka’ena, the parent company of Mint Mobile, for $1.35 billion. This transaction was approved by the U.S. Federal Communications Commission in April. In 2020, T-Mobile merged with Sprint in a deal valued at $26 billion.

According to a report by The Wall Street Journal in May, T-Mobile and Verizon were in discussions regarding the division of U.S. Cellular’s wireless spectrum, noting that a potential deal with Verizon on a separate transaction might take longer to materialize or not come to fruition.

Both companies anticipate the completion of the acquisition by mid-2025.

Correction: A previous version of this story incorrectly stated the timing of a prior Wall Street Journal article. The information has been revised for accuracy.

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