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WSJ Reports On Potential Split Deal - T-Mobile & Verizon To Buy US Cellular Ops/Spectrum

COMMUNICATIONS

  • The WSJ reported after the European close that T-Mobile and Verizon are nearing deals (in a separate split-sale structure aimed to mitigate competition concerns) to purchase parts of US Cellular's operations and spectrum.
  • T-Mobile’s deal valued at over USD 2bn and agreement could be reached as soon as this month while the Verizon deal is expected to take longer and may not result in agreement.
  • US Cellular is one of the last major regional Telcos and represents an opportunity to add subscribers in an area with typically lower penetration from the big service providers.
  • For context on size, US Cellular has a market cap of just over USD 3.1bn with total assets of 10.7bn. Verizon FY23 revenue and EBITDA were USD 133bn and USD 54bn while TMUS has USD 79bn and USD34bn.
  • TMUS USD bonds closed up to 5bps wider in the belly of their curve with their EUR bonds yet to stream this morning while Verizon’s USD curve was flatter yesterday. US Cellular equity closed +28%.

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