T-Mobile US Inc. has announced its acquisition of US Cellular Corp.'s wireless operations and part of its spectrum assets for approximately $2.4 billion. 

In a statement released on Tuesday, May 28, the companies announced that the purchase price of $4.4 billion will be paid through a combination of cash and the assumption of up to $2 billion in debt.

T-Mobile to Buy Majority of US Cellular

The agreement encompasses US Cellular's wireless customer base, retail locations, and a significant portion of its spectrum assets. The transaction is anticipated to be finalized in mid-2025, subject to regulatory approvals.

According to Reuters, US Cellular's share experienced a significant increase of over 7% in pre-market trading.

US Cellular will maintain ownership of approximately 70% of its spectrum, along with 4,400 telecom towers. T-Mobile has announced plans to lease space on a minimum of 2,600 towers.

T-Mobile plans to finance the agreement by using a mix of cash and up to $2 billion in debt, which will be taken on through an exchange offer for certain debtholders of US Cellular.

T-Mobile reassured investors that the deal will have no impact on its financial forecast or shareholder return program for 2024.

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Regulatory Approval Still Pending

The company expects that the agreement will result in approximately $1 billion in cost savings from operating expenses and capital spending. The predicted timeline for the deal's completion is projected to be in mid-2025, pending the necessary regulatory approvals. 

The transaction involves a mix of cash and approximately $2 billion of debt that will be taken on. A significant portion of the cash component, amounting to up to $100 million, is dependent on achieving specific financial and operational targets during the period between the agreement's signing and its completion.

The deal has received unanimous approval from the boards of United States Cellular Corp. and Telephone and Data Systems Inc, the majority shareholder of US Cellular.

In April, T-Mobile received approval from the US to acquire Mint Mobile, a budget wireless provider that actor Ryan Reynolds has a partial ownership in. In March 2023, the company put forward a proposal to acquire Ka'ena Corp., the parent company of Mint, through a deal worth up to $1.35 billion. The proposed acquisition would involve a combination of 39% cash and 61% stock.

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