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T-Mobile agreed to buy Mint Mobile for $1.35bn

T-Mobile US will acquire Ka’ena Corporation and its subsidiaries, including Ryan Reynolds’-backed budget service Mint Mobile, for $1.35bn. The deal is a combination of 39% cash and 61% stock, with the final purchase price depending on Ka’ena’s performance during certain periods before and after the closing.

T-Mobile US is the second-largest wireless carrier in the US, with more than 110 million subscribers as of the end of Q2 2022. The telecom operator looks to sustain growth in a highly competitive market. The deal would allow T-Mobile to gain additional market share of the pay-as-you-go customer base, which is expected to expand significantly. The acquisition would also help T-Mobile compete against its growing rivals Verizon and AT&T.

The deal also includes Ultra Mobile, which focuses on facilitating cost-effective international calls, and the wireless wholesaler Plum. With this agreement, T-Mobile will be able to maintain its marketing campaign Un-carrier’s large, fast, and reliable 5G network. T-Mobile plans to use its supplier relationships and distribution scale to help the brands to grow and offer competitive pricing and greater device inventory to more U.S. consumers seeking value offerings. The Mint and Ultra brands are complementary to the company’s current prepaid service offerings Metro by T-Mobile, T-Mobile branded prepaid, and Connect by T-Mobile.

After the acquisition, Mint will remain its operation mostly as an independent business, directed by its co-founders David Glickman and Rizwan Kassim. T-Mobile also says it will retain the company’s $15 per month pricing plan. Mint Mobile was officially put up for sale back in 2021, with a value speculated to be between $600mn and $800mn. Several companies were mentioned as potential buyers, with Altice USA being one of the most prominent. However, reports of T-Mobile interest in acquiring the company only surfaced at the start of the year.

T-Mobile’s share price rose more than 1.25% to trade at $144.82 per share at 2.40 pm New York time on Wednesday, 15th March after the announcement. The deal is expected to close by the end of this year.

Written by: Quynh Chi Le

Sources: Reuters, Investopedia, Total Telecom

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