May 28, 2024 – T-Mobile US, Inc. and United States Cellular Corporation (US Cellular) have announced that they have entered into an agreement in which T-Mobile will acquire nearly all of US Cellular’s wireless operations for approximately $4.4 billion.

T-Mobile is the third-largest U.S. wireless carrier, with roughly 117.9 million subscribers as of the end of 2023. US Cellular, headquartered in Chicago, provides mobile wireless to 4.5 million retail connections in 21 states.

The deal includes US Cellular’s wireless customers, stores, and 30% of the company’s spectrum assets. US Cellular will retain ownership of approximately 70% of its spectrum portfolio across several spectrum bands and its towers.

As part of the agreement, T-Mobile will enter into a long-term arrangement to lease space “on a minimum of 2,015 incremental towers owned by US Cellular and extend the lease term for the approximately 600 towers where T-Mobile is already a tenant.”

Telephone and Data Systems, Inc. (TDS), which owns 83% of US Cellular, has delivered its written consent approving the transaction. The $4.4 billion purchase price includes a combination of cash and up to approximately $2 billion of assumed debt. The transaction is subject to customary closing conditions and certain regulatory approvals, and is expected to close in mid-2025.

T-Mobile’s press release provides the following details on the transaction:

T-Mobile will pay approximately $4.4 billion for the assets being acquired from UScellular in the transaction in a combination of cash and up to $2.0 billion of debt to be assumed by T-Mobile through an exchange offer to be made to certain UScellular debtholders prior to closing. To the extent any debtholders do not participate in the exchange, their bonds will continue as obligations of UScellular and the cash portion of the purchase price will be correspondingly increased. Following the closing of the transaction, UScellular will retain ownership of its other spectrum as well as its towers, with T-Mobile entering into a long-term arrangement to lease space on at least 2,100 additional towers being retained. T-Mobile does not expect the transaction to impact the company’s 2024 guidance or 2024 authorized shareholder return program. T-Mobile expects this transaction will yield approximately $1.0 billion in effective total opex and capex annual run rate cost synergies upon integration, with total cost to achieve the integration currently estimated at between $2.2 billion to $2.6 billion. The company plans to reinvest a portion of synergies toward enhancing consumer choice, quality and competition in the wireless industry. The transaction, which is subject to the satisfaction of customary closing conditions and receipt of certain regulatory approvals, is expected to close in mid-2025.

US Cellular’s press release provides the following details on the transaction:

In connection with the agreement, T-Mobile will enter into a new long-term MLA on a minimum of 2,015 incremental towers owned by UScellular and extend the lease term for the approximately 600 towers where T-Mobile is already a tenant. This will ensure continued, uninterrupted service for UScellular customers following the transaction and create a long-term contracted revenue stream from a strong anchor tenant for at least 15 years after the close of the transaction. With the inclusion of the towers occupied by other existing third-party tenants, UScellular's tower assets will represent one of the largest and most attractive tower businesses in the United States. UScellular retains approximately 70% of its spectrum portfolio across several spectrum bands and will seek to opportunistically monetize these retained assets. UScellular also retains significant equity method investment interests, primarily from its wireless partnerships, that generated $158 million of equity method income and $150 million in distributions in 2023.