8-KRegulation FDExhibits & Filings

T-Mobile US, Inc. 8-K Report, Regulation FD Disclosure (Jul 24, 2024)

Filed July 24, 2024For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) has announced a significant strategic move through a definitive agreement to establish a joint venture (JV) with KKR & Co. Inc. (KKR) to acquire Metronet Holdings, LLC. This JV aims to acquire Metronet's fiber broadband infrastructure, residential fiber business, and existing customers. T-Mobile will acquire 100% of Metronet's residential fiber retail operations and customers, and will become the exclusive seller of Metronet's residential fiber services under the T-Mobile brand through a wholesale agreement. This transaction represents T-Mobile's strategic expansion into the fixed-line broadband market, leveraging Metronet's infrastructure. T-Mobile expects to invest approximately $4.9 billion for a 50% equity stake in the JV, with the JV intended to be self-funding post-closing. The company anticipates this move will support its existing stockholder remuneration plan. The transaction is expected to close in 2025, subject to regulatory approvals and closing conditions.

Key Highlights

  • 1T-Mobile enters a joint venture with KKR to acquire Metronet's fiber broadband assets and operations.
  • 2T-Mobile will acquire Metronet's residential fiber retail operations and customers, and become the exclusive seller of its fiber services.
  • 3The JV aims to pass approximately 6.5 million homes with fiber by the end of 2030.
  • 4T-Mobile to invest approximately $4.9 billion for a 50% equity stake in the JV.
  • 5The JV is expected to be self-funding on a go-forward basis, with no additional capital anticipated from T-Mobile after closing.
  • 6T-Mobile holds options to increase its ownership in the JV to 50.01% and to purchase KKR's interest in the future.
  • 7The transaction is expected to close in 2025, subject to customary closing conditions and regulatory approvals.

Frequently Asked Questions

This transaction represents T-Mobile's strategic expansion into the fixed-line broadband market. By acquiring Metronet's fiber infrastructure and customer base, T-Mobile aims to leverage its brand and distribution capabilities to offer residential fiber services, complementing its existing wireless offerings and diversifying its revenue streams.

T-Mobile expects to invest approximately $4.9 billion for a 50% equity stake in the joint venture at closing. The company also anticipates that the JV will be self-funding on a go-forward basis, meaning T-Mobile does not expect to contribute additional capital after the initial investment to support the current business plan.

The joint venture aims to expand Metronet's fiber footprint to pass approximately 6.5 million homes by the end of 2030. T-Mobile will market and sell these residential fiber services under its own brand.

From the fourth to the seventh anniversary of closing, T-Mobile has an option to increase its ownership to 50.01%. Additionally, within a similar timeframe, T-Mobile has an option to purchase KKR's interest in the JV at fair market value, subject to certain financial conditions.