T-Mobile has agreed to a blockbuster deal to acquire most of USCellular in an estimated $4.4 billion acquisition.
As part of the deal, T-Mobile will pay cash and up to $2 billion of USCellular's debt, subject to an agreement reached between T-Mobile and US Cellular's debt holders after closing.
The new agreement will give US mobile customers access to T-Mobile's 5G technology, pre-existing plans and customer service operations. Areas previously disclosed by USCellular will also be accessible to existing customers through T-Mobile.
T-Mobile said the merger will boost competition between other rival companies.
“With this deal, T-Mobile can extend the superior Un-carrier value and experiences we're known for to millions of US mobile customers and offer them lower-priced plans with bundled value and best-in-class connectivity on our nationwide 5G network,” said Mike Sievert, CEO of T-Mobile, in a company release. “As customers from both companies will have more coverage and more capacity from our combined footprint, our competitors will be forced to keep up – and even more customers will benefit.”
USCellular said in a special release that the new deal will hand over all of its wireless operations to T-Mobile, including those in “underserved” and “rural” areas that previously had little coverage.
“The decisions we announced today are in the best interest of our customers and our shareholders,” said Laurent Therivel, CEO of UScellular. “We are committed to serving the needs of our customers and supporting our associates as we work to complete the transaction.”
The acquisition of USCellular by T-Mobile was unanimously recommended by USCellular's independent directors and unanimously voted for approval by the USCellular Board of Directors and the Board of Directors of TDS, which owns 83% of USCellular's stock.
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T-Mobile had a strong Q1 2024, reporting net income of $2.4 billion, a 22% increase from the same period last year. The wireless company also saw a 4% year-over-year increase in service revenue, to about $16.1 billion.
“Our model is working. It's consistent. And our confidence in it only grows with every quarter of success,” Sievert said in a call earnings in that time. “We remain focused on continued growth in wireless and broadband while delivering industry-leading growth in service revenue, profitability and cash flows.”
UScellular it was upstairs over 12% in a 24-hour period on news of the purchase since late Tuesday afternoon.