T-Mobile Will Acquire Ryan Reynolds' Mint Mobile

T-Mobile, the third-largest wireless carrier in the United States, has announced its (up to) $1.35 billion acquisition of Ka'ena, the parent company of prepaid wireless darlings Mint Mobile and Ultra. The deal will bolster T-Mobile's position in the highly competitive U.S. wireless market, and broaden its customer base by adding Mint Mobile's three million subscribers to its network.

Mint Mobile, founded in 2016, has carved out a niche in the prepaid wireless market by offering value-rich, cost-effective plans with flexible options. The company's popularity soared after Hollywood actor Ryan Reynolds purchased an ownership stake in 2019 and began promoting the brand through humorous ads and social media campaigns. Reynolds, who will retain his ownership interest, is expected to continue working with the company after the acquisition.

"We are so happy T-Mobile beat out an aggressive last-minute bid from my mom Tammy Reynolds as we believe the excellence of their 5G network will provide a better strategic fit than my mom's slightly-above-average mahjong skills," Reynolds joked in remarks to the press.

T-Mobile has long been known for its disruptive "Un-carrier" approach, which offers customers innovative, value-driven plans, perks and features, and has recently entered the home internet game. The acquisition of Mint Mobile aligns with this strategy, as Mint's affordable plans and customer-centric approach have helped it stand out from competitors like AT&T and Verizon. The deal is also expected to accelerate T-Mobile's growth in the prepaid market — an area the company continues expanding aggressively.

The terms of T-Mobile's Mint Mobile acquisition

Under the terms of the agreement, T-Mobile's $1.35 billion purchase will be through a 39% cash transaction and the acquisition of 61% worth of stock assets. To be clear, T-Mobile's purchase ceiling is contingent upon Ka'ena reaching certain performance milestones within the next two years, though it remains hushed about the specifics. The acquisition is expected to close in the second half of 2023, subject to regulatory approval and other customary closing conditions.

T-Mobile's CEO Mike Sievert has assured customers that Mint Mobile will continue to operate as a separate brand with its own distinct identity. He emphasized that the acquisition will provide Mint with the resources and infrastructure to grow faster and offer even better services to its customers.

"Mint has built an incredibly successful digital direct-to-consumer business that continues to deliver for customers on the Un-carrier's leading 5G network and now we are excited to use our scale and owners' economics to help supercharge it — and Ultra Mobile — into the future," Sievert said in a statement. "Over the long-term, we'll also benefit from applying the marketing formula Mint has become famous for across more parts of T-Mobile. We think customers are really going to win with a more competitive and expansive Mint and Ultra."

Moreover, the deal is expected to benefit both T-Mobile and Mint Mobile subscribers, as both stand to gain access to a broader range of products and service options as a result of the convergence.