T-Mobile announces a $4.4 billion deal with U.S. Cellular

on May 28, 2024
  • T-Mobile announces plans of buying most of U.S. Cellular.
  • The all-cash agreement does also include $2.0 billion of debt.
  • A brief overview of what's in it for both companies.

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T-Mobile U.S. Inc (NASDAQ: TSUM) is in focus today after announcing plans of buying most of U.S. Cellular for about $4.4 billion.

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Details of T-Mobile’s agreement with $USM

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The all-cash agreement will see $TMUS acquire stores, customers, and some of the spectrum of United States Cellular Corp (NYSE: USM).

T-Mobile expects the acquisition to help improve coverage in the rural areas. Mike Sievert – its chief executive said in a press release today:

With this deal, T-Mobile can deliver them [U.S. Cellular customers] lower-priced, value-packed plans and better connectivity on our best-in-class nationwide 5G network.

Note that U.S. Cellular customers will have the option to shift to $TMUS or remain on their current plan if they’d like. T-Mobile stock is currently up some 5.0% versus its year-to-date low.

$TSUM – U.S. Cellular deal to close in 2025

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The agreement between T-Mobile and U.S. Cellular this morning also includes $2.0 billion of debt.

The wireless network operator expects the announced transaction to complete in the first half of 2025. Its CEO Sievert also said on Tuesday:

The Un-carrier 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.

The news arrives about a month after T-Mobile reported its financial results for the first quarter that topped Street estimates. Wall Street currently has a consensus “overweight” rating on $TMUS that pays a dividend yield of 1.57% at writing.

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