Shares of U.S. Cellular skyrocketed nearly 6% on Tuesday, all thanks to T-Mobile’s grand announcement: they plan to scoop up most of U.S. Cellular, including its stores, some spectrum assets, and a bunch of happy customers, all wrapped up in a $4.4 billion deal. Talk about a shopping spree!
Here’s the scoop: the deal includes a hefty pile of cash and up to $2 billion in debt, according to T-Mobile’s press release. And there’s a twist! Up to $100 million of that cash is like the cherry on top, contingent on hitting certain financial and operational milestones before the deal seals the deal.
Meanwhile, T-Mobile shares also got a little love, ticking up more than 1% during Tuesday’s session. Looks like investors are excited about T-Mobile’s new shopping cart.
In this mega deal, T-Mobile is grabbing about 30% of U.S. Cellular’s wireless spectrum. The plan? Supercharge coverage in rural areas and offer a better connection to U.S. Cellular’s loyal users across the country. And fear not, U.S. Cellular customers—you can keep your current plans or jump ship to a shiny new T-Mobile plan. Options, options!
But wait, there’s more! U.S. Cellular isn’t losing all its goodies. They’ll keep 70% of their wireless spectrum and towers, and they’ll be leasing space on at least 2,100 more towers to T-Mobile. Plus, T-Mobile gets to sign new long-term leases on at least 2,015 U.S. Cellular-owned towers and extend leases on about 600 others. It’s a win-win, like sharing your dessert but keeping the best bites for yourself.
U.S. Cellular assures everyone that this deal gives their customers a “strong anchor tenant” for at least 15 years post-deal. So, there’s no need to worry about your signal going AWOL.
This isn’t T-Mobile’s first rodeo, either. They recently bagged Ka’ena, the parent company of Mint Mobile, for a cool $1.35 billion. The U.S. Federal Communications Commission gave that deal a thumbs-up in April. And let’s not forget T-Mobile’s big merger with Sprint back in 2020, worth a whopping $26 billion. Clearly, T-Mobile loves a good acquisition!
And if you thought that was the end, think again! The Wall Street Journal spilled the beans earlier in May that T-Mobile and Verizon were eyeing U.S. Cellular’s wireless spectrum like kids in a candy store. While talks with Verizon might take a bit longer or even fizzle out, it’s safe to say T-Mobile isn’t slowing down.
