| Item 1.01 | Entry into a Material Definitive Agreement |
On September 12, 2023, T-Mobile US, Inc. (the “Company”), its direct, wholly-owned subsidiary T-Mobile USA, Inc. (“T-Mobile USA”), and its affiliate T-Mobile License LLC (together with T-Mobile USA, “T-Mobile”), entered into a License Purchase Agreement (the “License Purchase Agreement”) with Comcast Corporation and its affiliate Comcast OTR1, LLC (together with Comcast Corporation, “Comcast”). Pursuant to the License Purchase Agreement, T-Mobile License LLC will acquire spectrum in the 600 MHz band from Comcast (the “Licenses”) in exchange for total cash consideration of between $1.2 billion and $3.3 billion (the “Purchase Price”). 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”). The parties expect to make the requisite transfer filings with the FCC in the first half of 2027. The closing is anticipated by T-Mobile to occur in the first half of 2028. The License Purchase Agreement contains customary representations, warranties, and covenants.
The final Purchase Price will be determined, in the aggregate and on a per License basis, based on the set of Licenses subject to the License Purchase Agreement at the time the parties make required transfer filings with the FCC. Prior to the time of such filings, Comcast has the right to remove any or all of a certain specified subset of the Licenses (the “Optional Sale Licenses”) from the License Purchase Agreement. The removal of any Optional Sale Licenses would reduce from $3.3 billion the final Purchase Price by the assigned value of each such License.
The Licenses are being acquired without any associated network, but the Licenses will be subject to a T-Mobile exclusive leasing arrangement entered into contemporaneously with the License Purchase Agreement. If Comcast elects to remove an Optional Sale License from the License Purchase Agreement, the associated lease for such Optional Sale License will terminate, but no sooner than two years from the date of the License Purchase Agreement (with T-Mobile having a minimum period of time after any such termination to cease transmitting on such License’s associated spectrum).
The geographic areas covered by the Licenses that may not be removed from the License Purchase Agreement include markets covering approximately 39 million pops, including New York, New York; Orlando, Florida; Kansas City, Missouri; and other markets. The geographic areas covered by the Optional Sale Licenses include markets covering approximately 110 million pops, including Chicago, Illinois; San Francisco, California; Baltimore, Maryland / Washington D.C.; Boston, Massachusetts; Miami, Florida; Nashville, Tennessee; and other markets. Each market’s License covers 10MHz, except for Nashville, Tennessee, which covers 20MHz.
The description of the License Purchase Agreement is a summary only and is qualified in its entirety by the full and complete terms of the License Purchase Agreement.
