TDS Board Approves Sale of USCellular's Wireless Operations and Select Spectrum Assets to T-Mobile
Telephone and Data Systems, Inc. ("TDS") has announced that its board of directors has unanimously approved the sale of USCellular's wireless operations and approximately 30% of its spectrum assets to T-Mobile for a total purchase price of $4.4 billion, including a combination of cash and up to approximately $2 billion of assumed debt. This decision follows a thorough strategic review process initiated in August 2023.
The sale has been positioned as delivering significant value to USCellular customers and shareholders. TDS, as the 83 percent shareholder of USCellular, has delivered its written consent approving the transaction, which is expected to close in mid-2025, subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions.
TDS also announced the second-quarter 2024 dividends, highlighting its commitment to executing its strategy to grow its fiber footprint while increasing broadband penetrations and improving profitability. This includes bringing fiber to small and mid-sized, suburban, and rural communities across the United States.
In addition to the sale of the wireless operations and select spectrum assets, USCellular will benefit from the potential to opportunistically monetize the retained spectrum, representing approximately 70% of total spectrum assets across several spectrum bands. USCellular's tower assets will represent one of the largest tower businesses in the United States, with T-Mobile becoming a long-term tenant on a minimum of 2,015 incremental towers owned by USCellular, and extending the lease term for approximately 600 towers where T-Mobile is already a tenant.
The transaction is expected to position USCellular with a healthy balance sheet and a transformed tower infrastructure business poised for strong growth and value creation. Depending on the amount of proceeds from the sale, TDS intends to utilize the proceeds in the best interests of its shareholders, including continuing to invest in the company's fiber build-out program, reducing leverage levels, and potentially returning capital to shareholders while pursuing other opportunities to grow the business. As a result of these announcements, the company's shares have moved 0.4% on the market, and are now trading at a price of $18.84. For the full picture, make sure to review Telephone and Data Systems's 8-K report.
