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The US Department of Justice is advising the Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector to review T-Mobile's proposed $4.4 billion purchase of parts of UScellular because T-Mobile is owned by Deutsche Telekom.
The US Department of Justice (DoJ) is advising a deeper review of T-Mobile's proposed $4.4 billion purchase of parts of UScellular due to T-Mobile's foreign owner.
The review is necessary "to determine whether these applications pose a risk to the national security or law enforcement interests of the United States," according to the DoJ's new filing to the FCC. The DoJ said it "believes that such risk may be raised by the foreign participation (including the foreign relationships and ownership) associated with the applications."
Specifically, the DoJ is referring the transaction to the Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector. That committee, previously known as "Team Telecom," was formally established in 2020 to advise the FCC on "national security and law enforcement concerns associated with applications for telecommunications licenses meeting certain thresholds of foreign ownership or control."
The US Attorney General is the chair of the committee and the secretaries of the Defense Department and the Department of Homeland Security are also members of the committee.
T-Mobile is controlled by Germany's Deutsche Telekom, which indirectly holds 50.42% of T-Mobile's stock and also holds a proxy agreement that authorizes it to vote additional shares.
T-Mobile's bid for UScellular
T-Mobile said in May it plans to purchase around 30% of UScellular's spectrum holdings, all of its 4.5 million customers and its retail stores in a deal worth $4.4 billion. T-Mobile has also said it will make job offers to "a significant number" of UScellular's employees as part of the transaction.
That transaction is now under review at the FCC. The DoJ requested the FCC suspend its review of the transaction while the foreign assessment committee conducts its own review.
This isn't the first time the foreign assessment committee has reviewed a telecom transaction. For example, the FCC earlier this year recommended the committee review a $3.1 billion deal to take fiber network operator Consolidated Communications private. Private equity firm Searchlight Capital Partners and British Columbia Investment (BCI), one of the largest institutional investors in Canada, announced in 2023 their plan to take Consolidated private. They expect the deal to close in 2025.
It's not clear how the incoming Trump administration might view mergers and acquisitions in the US telecom industry, or foreign-owned companies conducting such transactions.
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