T-Mobile (NASDAQ:TMUS) stock is in the green today after the company announced a new deal to buy U.S. Cellular (NYSE:UZD). In the $4.4 billion transaction, T-Mobile will acquire most of U.S. Cellular, including the company’s stores, assets, and customers.
As part of the deal, T-Mobile will pony up both cash and up to $2 billion of debt. T-Mobile will gain roughly 30% of U.S. Cellular’s wireless spectrum, which it intends to use to enhance its coverage in more rural parts of the country. Per the deal, current U.S. Cellular customers will have the option of keeping their current plans or moving to T-Mobile plans.
T-Mobile Chief Executive Mike Sievert praised the deal:
“This deal will create opportunity for T-Mobile to bring millions of UScellular customers lower prices and the Un-carrier’s superior value on our best-in-class nationwide 5G network, offering much needed choice and more real competition across the wireless industry.”
U.S. Cellular will retain about 70% of its spectrum towers, at least 2,100 of which it plans to lease to T-Mobile. T-Mobile will have the option of signing new leases on more than 2,000 towers and extending leases on an additional 600.
As a result, U.S. Cellular’s customers will receive continued support for at least 15 years following the deal’s closure.
TMUS Stock Rises on U.S. Cellular Acquisition
Today’s news comes as a something of a followup to T-Mobile’s $1.35 billion purchase of Ka’ena, parent of Mint Mobile, which the U.S. Federal Communications Commission approved just last month. If you recall, T-Mobile also merged with Sprint back in 2020, in a whopping $26 billion dollar move.
Earlier this month, The Wall Street Journal reported that Verizon (NYSE:VZ) would also participate in the U.S. Cellular acquisition. However, it’s unclear if the company will be involved at a later date.
Sievert said this about the transaction:
“Bringing together UScellular’s network resources with ours will enable us to fill gaps in connectivity that will create a better experience for all of our customers with more coverage and more capacity. And this is just some of the goodness this deal will bring. This will be a real win for consumers across the U.S.”
TMUS stock is enjoying some modest gains on the news. Indeed, TMUS stock is up about 0.9% at the time of writing, while UZD stock enjoys more pronounced gains, up 17.5% heading into the afternoon
The deal is predicted to close in mid-2025.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
