Item 1.01 Entry into a Material Definitive Agreement
On August 8, 2022, T-Mobile US, Inc. (the “Company”), through its direct, wholly-owned subsidiary T-Mobile USA, Inc. (“T-Mobile USA”), and its affiliate T-Mobile License LLC, entered into License Purchase Agreements (the “License Purchase Agreements”) with Channel 51 License Co LLC, a Delaware limited liability company (“51 License”), and LB License Co, LLC, a Delaware limited liability company (“LB License,” and together with 51 License, “Sellers”). Pursuant to the License Purchase Agreements, T-Mobile License LLC will acquire spectrum in the 600 MHz band from Sellers (the “Licenses”) in exchange for total cash consideration of $3.5 billion (the “Purchase Price”), of which approximately $1.9 billion will be paid to 51 License and approximately $1.6 billion will be paid to LB License.
The geographic areas covered by the Licenses include markets in San Francisco, California, Atlanta, Georgia, Chicago, Illinois, Los Angeles, California, Boston, Massachusetts, Tampa, Florida, Columbus, Ohio, Minneapolis, Minnesota, Seattle, Washington, Philadelphia, Pennsylvania, Baltimore, Maryland, Washington, D.C., Dallas, Texas, Phoenix, Arizona, Houston, Texas, Salt Lake City, Utah, Saint Louis, Missouri and New Orleans, Louisiana. The Licenses range from 10MHz to 30MHz per market and cover over 108 million pops—approximately one third of the US population. The Licenses are being acquired without any associated network, but the Licenses are currently being utilized by T-Mobile through exclusive leasing arrangements with Sellers.
The License Purchase Agreements contain customary representations, warranties, and covenants with regard to the Licenses and Sellers’ ability to consummate the transactions.
Consummation of the proposed transactions is subject to various customary conditions, including, among others, expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approval of the transaction by the Federal Communications Commission (the “FCC”). Subject to satisfaction of these conditions, the parties have agreed that closing will occur within 180 days after the granting of required regulatory approvals and that payments of the Purchase Price will occur no later than 40 days after the date of such closing. The Company anticipates the transactions will close between mid-2023 and late-2023.
The description of the License Purchase Agreements is a summary only and is qualified in its entirety by the full and complete terms of the License Purchase Agreements.
