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T-Mobile (NASDAQ:TMUS) said it will acquire substantially all of UScellular’s (NYSE:USM) wireless operation, including UScellular’s wireless customers and stores, as well as certain specified spectrum assets for approimately $4.4B.
Shares of UScellular and T-Mobile both gained in mid-day trading, up 5.8% and 0.5%, respectively.
The deal is in a combination of cash and up to $2 billion of debt to be assumed by T-Mobile through an exchange offer to be made to certain UScellular debtholders prior to closing.
Telephone and Data Systems (TDS), the majority shareholder of UScellular, said it supported the deal.
The announcement comes weeks after telecom majors T-Mobile US (TMUS) and Verizon (VZ) were said to be in talks for separate transactions that would split up US Cellular (USM), one of the country’s last major regional wireless carriers.
USM separately confirmed the deal and said it will retain nearly 4,400 owned towers, its equity method investments, and approximately 70% of its spectrum assets.
T-Mobile (TMUS) will acquire UScellular’s wireless operations and approximately 30% of spectrum assets across several spectrum bands. In addition, T-Mobile will enter into a new master license agreement on more than 2,000 towers.
TMUS does not expect the deal to impact the company’s 2024 guidance or 2024 authorized shareholder return program.
The firm expects the deal to yield roughly $1 billion in effective total opex and capex annual run rate cost synergies upon integration, with total cost to achieve the integration currently estimated at between $2.2 billion to $2.6 billion.
“The transaction provides our customers 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,” said CEO of USM, Laurent Therivel.
(This story has been updated to include comments from Telephone and Data Systems.)