T-Mobile in $4.4bn US Cellular deal

August 2024 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

August 2024 Issue

In a move it claims will spur growth and increase competition, US wireless network operator T-Mobile is to acquire substantially all of regional wireless carrier US Cellular’s wireless operations for an enterprise value of $4.4bn.

Under the terms of the transaction, US Cellular’s assets will be acquired in a combination of cash and up to $2bn of debt to be assumed by T-Mobile through an exchange offer to be made to certain US Cellular debtholders prior to closing.

Upon closing, T-Mobile’s leading 5G network will expand to provide millions of US Cellular customers, particularly those in underserved rural areas, with a superior connectivity experience, moving from a roaming experience outside of the US Cellular coverage area to full nationwide access on the country’s largest and fastest 5G network.

At the same time, T-Mobile customers will get access to US Cellular’s network in areas that previously had limited coverage and the benefit of enhanced performance throughout US Cellular’s footprint from the addition of the acquired US Cellular spectrum to T-Mobile’s network.

US Cellular customers will also have the opportunity to participate in T-Mobile’s plans, with benefits and perks, and customer support, with the opportunity to save US Cellular customers hundreds of millions of dollars.

“With this deal T-Mobile can extend the superior Un-carrier value and experiences that we are famous for to millions of US Cellular customers and deliver them lower-priced, value-packed plans and better connectivity on our best-in-class nationwide 5G network,” said Mike Sievert, chief executive of T-Mobile. “As customers from both companies will get more coverage and more capacity from our combined footprint, our competitors will be forced to keep up – and even more consumers will benefit.”

T-Mobile has a proven industry-leading track record of bringing companies together in the name of enhanced connectivity, choice and value for consumers. The integrations of MetroPCS in 2013 and Sprint in 2020 have been noted as two of the most successful merger combinations in wireless history that resulted in competition-enhancing shifts benefitting millions of consumers.

“T-Mobile’s purchase and integration of US Cellular’s wireless operations will provide best-in-class connectivity to rural Americans through enhanced nationwide coverage and service offerings at more compelling price points,” said Laurent Therivel, chief executive of US Cellular. “The transaction provides our customers with access to better coverage and speeds, as well as unlimited texting in more than 215 countries, content offers, device upgrades and other T-Mobile benefits.”

Following the closing of the transaction, US Cellular 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 2100 additional towers being retained.

Subject to the satisfaction of customary closing conditions and receipt of certain regulatory approvals, the transaction is expected to close in mid-2025.

Acting as legal counsel to T-Mobile are Cleary Gottlieb Steen & Hamilton LLP and DLA Piper LLP. Clifford Chance LLP and Wilkinson Barker Knauer, LLP are serving as legal regulatory advisers to US Cellular.

Mr Sievert concluded: “T-Mobile is all about shaking up wireless for the good of consumers and this deal is another way for us to continue doing even more of that.”

Fraser Tennant