v3.25.2
Business Combinations
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations
Note 2 – Business Combinations

Acquisition of Ka’ena Corporation

On March 9, 2023, we entered into a merger and unit purchase agreement (the “Merger and Unit Purchase Agreement”) for the acquisition of 100% of the outstanding equity of Ka’ena Corporation and its subsidiaries, including, among others, Mint Mobile LLC (collectively, “Ka’ena”), for a maximum purchase price of $1.35 billion to be paid out 39% in cash and 61% in shares of T-Mobile common stock (the “Ka’ena Acquisition”). On March 13, 2024, we entered into Amendment No. 1 to the Merger and Unit Purchase Agreement, which amended, among other things, certain mechanics of the payment of the purchase consideration for the Ka’ena Acquisition, which resulted in a nominal increase in the percentage of cash compared to shares of T-Mobile common stock to be paid out as part of the total purchase price.

Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on May 1, 2024 (the “Ka’ena Acquisition Date”), we completed the Ka’ena Acquisition, and as a result, Ka’ena became a wholly owned subsidiary of T-Mobile. Concurrently, and as agreed upon through the Merger and Unit Purchase Agreement, T-Mobile and Ka’ena entered into certain separate transactions, including the effective settlement of the preexisting wholesale arrangement between T-Mobile and Ka’ena and agreements with certain of the sellers to provide services to T-Mobile during the post-acquisition period.

In accordance with the terms of the Merger and Unit Purchase Agreement, the total purchase price was variable, dependent upon specified performance indicators of Ka’ena, and consists of an upfront payment on the Ka’ena Acquisition Date and an earnout payable on August 1, 2026. On June 30, 2025, we amended the Merger and Unit Purchase Agreement to set the calculation of the earnout as the difference between the maximum purchase price of $1.35 billion and the upfront payment, as adjusted, and removed the requirement for Ka’ena to achieve specified performance indicators.

As of June 30, 2025, and December 31, 2024, $236 million and $202 million of liabilities for deferred consideration, respectively, and $137 million and $80 million of liabilities for post-acquisition services, respectively, were presented within Other long-term liabilities on our Condensed Consolidated Balance Sheets.

Fair Value of Assets Acquired and Liabilities Assumed

We accounted for the Ka’ena Acquisition as a business combination. The identifiable assets acquired and liabilities assumed from Ka’ena were recorded at their fair values as of the Ka’ena Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the Ka’ena Acquisition Date required the use of judgment regarding estimates and assumptions. For the fair values of the assets acquired and liabilities assumed, we used the cost and income approaches.
The following table summarizes the assigned fair values for each class of assets acquired and liabilities assumed at the Ka’ena Acquisition Date, as adjusted during the measurement period, which closed on April 30, 2025, based on information identified after the Ka’ena Acquisition Date. We retained the services of certified valuation specialists to assist with assigning values to certain acquired assets.
(in millions)May 1, 2024
Cash and cash equivalents$24 
Accounts receivable34 
Inventory3 
Prepaid expenses5 
Other current assets10 
Property and equipment1 
Operating lease right-of-use assets2 
Goodwill777 
Other intangible assets740 
Other assets51 
Total assets acquired1,647 
Accounts payable and accrued liabilities42 
Deferred revenue297 
Short-term operating lease liabilities1 
Deferred tax liabilities83 
Operating lease liabilities2 
Other long-term liabilities81 
Total liabilities assumed506 
Total consideration transferred$1,141 

Intangible Assets

Goodwill with an assigned value of $777 million represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The assigned goodwill recognized includes expected growth in customers and service revenues to be achieved from the operations of the combined company, the assembled workforce of Ka’ena and intangible assets that do not qualify for separate recognition. Of the total amount of assigned goodwill resulting from the Ka’ena Acquisition of $777 million, the amount deductible for tax purposes is $121 million. All of the goodwill acquired is allocated to the Wireless reporting unit.

Acquisition of UScellular Wireless Business

On May 24, 2024, we entered into a securities purchase agreement with United States Cellular Corporation (“UScellular”), Telephone and Data Systems, Inc., and USCC Wireless Holdings, LLC, pursuant to which, among other things, we will acquire substantially all of UScellular’s wireless operations and select AWS, PCS, 600 MHz, 700 MHz and other spectrum assets (together, the “UScellular Wireless Business”) for an aggregate purchase price of approximately $4.4 billion, payable in cash and the assumption of up to $2.0 billion of debt through exchange offers to certain UScellular debtholders prior to closing (the “UScellular Acquisition”). Upon closing of the transaction, we expect to account for the UScellular Acquisition as a business combination and to consolidate the acquired operations.

Following the closing of the transaction, UScellular will retain ownership of its other spectrum, as well as its towers. Subject to the closing of the transaction, we will enter into a 15-year master license agreement to lease space on at least 2,100 towers being retained by UScellular and to extend our tenancy term on approximately 600 towers where we are already leasing space from UScellular for 15 years post-closing. We estimate the incremental future minimum lease payments associated with the master license agreement will be $1.4 billion over 15 years post-closing.

On May 23, 2025, we launched exchange offers for any and all of certain outstanding senior notes of UScellular (the “Exchange Offers”). In conjunction with the Exchange Offers, we also solicited consents for each series of the outstanding senior notes of UScellular to effect a number of amendments to the applicable indenture under which each such series of notes were issued and are governed (the “Consent Solicitations”). As of July 1, 2025, the total principal amount of certain outstanding UScellular senior notes validly tendered was $1.7 billion. To the extent any debtholders do not participate in the Exchange Offers, their senior notes will continue as obligations of UScellular, and the cash portion of the purchase price will be correspondingly
increased. The consummation of the Exchange Offers and Consent Solicitations are subject to the closing of the UScellular Acquisition and will expire on August 1, 2025.

On July 11, 2025, we received all necessary regulatory approvals, and the UScellular Acquisition is expected to close on August 1, 2025.

On July 22, 2025, we entered into asset purchase agreements for the acquisition of substantially all of the wireless operations assets of each of Farmers Cellular Telephone Company, Inc., Iowa RSA No. 9 Limited Partnership, and Iowa RSA No. 12 Limited Partnership (collectively, the “Iowa Entities”) for an aggregate purchase price of approximately $170 million. These transactions are expected to close concurrently with the UScellular Acquisition on August 1, 2025. Upon closing of the acquisition of the wireless operations assets of the Iowa Entities, we expect to account for the transactions as a business combination. Following the closing of the acquisition of the wireless operations assets of the Iowa Entities, the Iowa Entities will retain ownership of their towers and spectrum.

Acquisition of Vistar Media Inc.

On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100% of the outstanding capital stock of Vistar Media Inc. (“Vistar”), a provider of technology solutions for digital-out-of-home advertisements (the “Vistar Acquisition”).

Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on February 3, 2025 (the “Vistar Acquisition Date”), we completed the Vistar Acquisition, and as a result, Vistar became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $621 million. A portion of the payment made on the Vistar Acquisition Date was for the settlement of preexisting relationships with Vistar and is excluded from the fair value of consideration transferred.

The financial results of Vistar from the Vistar Acquisition Date through June 30, 2025, were not material to our Condensed Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Costs related to the Vistar Acquisition were not material to our Condensed Consolidated Statements of Comprehensive Income.

Fair Value of Assets Acquired and Liabilities Assumed

We have accounted for the Vistar Acquisition as a business combination. The identifiable assets acquired and liabilities assumed from Vistar were recorded at their provisionally assigned fair values as of the Vistar Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the Vistar Acquisition Date requires the use of judgment regarding estimates and assumptions. For the provisionally assigned fair values of the assets acquired and liabilities assumed, we used the cost and income approaches.
The following table summarizes the provisionally assigned fair values for each class of assets acquired and liabilities assumed at the Vistar Acquisition Date. We are in the process of finalizing the valuation of the assets acquired and liabilities assumed, including income tax-related amounts. Therefore, the provisionally assigned fair values set forth below are subject to adjustment as additional information is obtained.
(in millions)February 3, 2025
Cash and cash equivalents$42 
Accounts receivable157 
Prepaid expense and other current assets2 
Property and equipment1 
Operating lease right-of-use assets1 
Goodwill345 
Other intangible assets264 
Total assets acquired812 
Accounts payable and accrued liabilities129 
Deferred revenue1 
Deferred tax liabilities61 
Operating lease liabilities2 
Total liabilities assumed193 
Total consideration transferred$619 

Intangible Assets

Goodwill with a provisionally assigned value of $345 million represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes expected growth in service revenues to be achieved from the operations of the combined company, the assembled workforce of Vistar and intangible assets that do not qualify for separate recognition.

Other intangible assets acquired primarily include $201 million of customer relationships with an estimated weighted-average useful life of nine years, $8 million of tradenames with an estimated weighted-average useful life of four years and $55 million of other intangible assets with an estimated weighted-average useful life of four years. The customer relationships are amortized using the sum-of-the-years digits method over their estimated useful lives, and the tradenames are amortized on a straight-line basis over their estimated useful lives.

The preliminary fair value of customer relationships was estimated using the income approach. This fair value measurement is based on significant inputs not observable in the market, and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach include revenue over an estimated period of time, the discount rate, forecasted expenses and contributory asset charges.

Acquisition of Blis Holdco Limited

On February 18, 2025, we entered into a share purchase agreement for the acquisition of 100% of the outstanding capital stock of Blis Holdco Limited (“Blis”), a provider of advertising solutions (the “Blis Acquisition”).

Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on March 3, 2025 (the “Blis Acquisition Date”), we completed the Blis Acquisition, and as a result, Blis became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $180 million. A portion of the payment made on the Blis Acquisition Date was for the settlement of preexisting relationships with Blis and is excluded from the fair value of consideration transferred.

We have accounted for the Blis Acquisition as a business combination. The fair value of consideration transferred as of the Blis Acquisition Date totaled $175 million. The identifiable assets acquired and liabilities assumed from Blis were recorded at their provisionally assigned fair values as of the Blis Acquisition Date and consolidated with those of T-Mobile. The provisionally assigned fair values of total assets acquired, including goodwill, and total liabilities assumed at the Blis Acquisition Date were $280 million and $105 million, respectively. Goodwill with a provisionally assigned value of $104 million represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed.

We are in the process of finalizing the valuation of the assets acquired and liabilities assumed. Therefore, the provisionally assigned fair values above are subject to adjustment as additional information is obtained.