T-Mobile to acquire most of US Cellular in $4.4 billion deal including debt

T-Mobile would get more than 4 million new customers and control of U.S. Cellular’s wireless operations and about 30% of spectrum assets across several spectrum bands. T-Mobile will also enter into a new master license agreement on more than 2,000 towers and extend the lease term for the approximately 600 towers where T-Mobile is already a tenant.

T-Mobile CEO Mike Sievert said the deal will “create a better experience for all of our customers with more coverage and more capacity.”

T-Mobile is among the more active companies in telecommunications with regard to mergers and acquisitions. And in 2020 T-Mobile completed the takeover of smaller rival Sprint. In 2013 the Federal Communications Commission approved its merger with MetroPCS Communications Inc.

T-Mobile said Tuesday that U.S. Cellular customers will gain access to its 5G network, giving them better coverage and speed. The company said the deal will particularly benefit those that live in underserved rural areas of the country.

“In the face of rising competition and increasing capital intensity required to keep pace with the latest technologies, and following our careful and deliberate strategic review, we are confident that continuing to deliver on our mission requires a level of scale and investment that is best achieved by integrating our wireless operations with those of T-Mobile,” U.S. Cellular Chair LeRoy Carlson Jr. said in a statement.

T-Mobile said that U.S. Cellular customers will be able to remain on their current plans or switch to an unlimited T-Mobile plan of their choice. They will not incur switching costs if a plan change is made.

The transaction includes a combination of cash and up to about $2 billion of assumed debt. Up to $100 million of the cash component is contingent on hitting certain financial and operational metrics between the deal’s signing and closing.

U.S. Cellular will keep about 70% of of its spectrum portfolio across several spectrum bands.

The deal has been unanimously approved by the boards of United States Cellular Corp. and Telephone and Data Systems Inc, which is a majority shareholder of U.S. Cellular. It is expected to close in mid-2025.

U.S. Cellular’s stock jumped more than 12% before the opening bell on Tuesday, while shares of Telephone and Data Systems surged more than 17%.