T-Mobile US Inc (TMUS.O) on Monday said it will acquire the wireless operations of UScellular (USM.N) for $4.4 billion in cash and assumed debt, a deal that will expand the telecom giant’s 5G network reach and customer base, particularly in rural areas.
The acquisition will see T-Mobile, the second-largest U.S. wireless carrier, absorb UScellular’s 4.2 million wireless customers and certain spectrum assets covering around 21 million people across 18 states, the companies said.
Expanding T-Mobile reach in rural areas
Upon closing, expected by mid-2025, UScellular customers will gain access to T-Mobile’s nationwide 5G network and pricing plans, with the potential for hundreds of millions in combined customer savings, according to the companies. T-Mobile cited opportunities for enhanced rural broadband expansion through the added spectrum and network assets.
«This deal allows T-Mobile to extend our superior 5G network and value-packed plans to millions more customers, while increasing competition and choice in wireless across the country,» said Mike Sievert, Chief Executive Officer of T-Mobile.
The transaction carries an enterprise value of $7.9 billion when factoring UScellular’s outstanding debt, according to a source familiar with the deal.
Other costs of the acquisition
T-Mobile expects around $1 billion in annual cost synergies from combining the operations, with one-time integration costs pegged at $2.2 billion to $2.6 billion. The company said it does not anticipate the deal impacting 2024 financial guidance.
UScellular, a regional carrier founded in 1983 and headquartered in Chicago, will retain certain spectrum licenses along with its network of over 4,000 towers following the sale of the wireless business. T-Mobile agreed to a long-term lease for at least 2,100 of those tower sites.
«Joining T-Mobile provides our customers better coverage and speeds through their nationwide 5G footprint, as well as compelling new plan options and benefits,» said Laurent Therivel, CEO of UScellular.
The deal, subject to regulatory approval, would further consolidate the U.S. wireless market, which has shrunk in recent years amid merger activity. It follows T-Mobile’s $23 billion acquisition of rival Sprint in 2020.
Shares of T-Mobile were up 10% in premarket trading following the announcement.
