U.S. Cellular to Pay Special Dividends, Rename After T-Mobile Acquisition

US Cellular plans to issue a special dividend between $22.50 and $23.75 per share after selling its wireless operations and spectrum assets to T-Mobile US. The company will also change its corporate name following the deal. The dividend will be paid to shareholders after the sale is completed.

United States Cellular Corporation (NYSE: USM), also known as UScellular, has announced plans to issue a special dividend between $22.50 and $23.75 per share to shareholders following the sale of its wireless operations and select spectrum assets to T-Mobile US (NASDAQ: TMUS). The dividend is contingent on the successful closing of the transaction and subject to approval by the company's board of directors [1].

The expected special dividend amounts to an aggregate of $1.950 billion to $2.075 billion, with the exact amount to be determined by the board. This significant payout is expected to provide ample liquidity and financial flexibility for the post-closing business, which will have a significantly different financial and operational profile [1].

In addition to the special dividend, UScellular has also announced two significant developments. First, upon closing the sale, the company intends to change its name to Array Digital Infrastructure, Inc. Second, Douglas Chambers will serve as the interim CEO of the post-closing Array business [1, 4]. Chambers, currently the Executive Vice President, Chief Financial Officer, and Treasurer of UScellular, will oversee the company's 4,400 towers, investment stakes, and wireless spectrum [4].

The sale of UScellular's wireless operations to T-Mobile US is expected to close by August 1, 2025, subject to satisfaction of closing conditions. The transaction is part of T-Mobile's broader strategy to expand its network and diversify its service offerings beyond mobile, including fiber, satellite, and fixed wireless broadband services [2].

Analysts have forecast an average target price of $73.11 for UScellular, with a potential upside of 2.25% from the current price of $71.50 following the transaction [4]. The sale of UScellular's wireless operations to T-Mobile is expected to boost T-Mobile's network from 9,000 to 12,000 sites, further solidifying its position in the American mobility market [2].

References:
[1] https://www.prnewswire.com/news-releases/uscellular-announces-expected-amount-of-special-dividend-302513556.html
[2] https://finance.yahoo.com/news/why-t-mobile-us-stock-175915517.html
[4] https://www.ainvest.com/news/cellular-outlines-leadership-rebranding-plans-post-mobile-transaction-2507/