Ryan Reynolds-backed Mint Mobile to join T-Mobile in deal worth US$1.35B

FILE - Ryan Reynolds arrives at the 36th annual American Cinematheque Awards, Nov. 17, 2022, at the Beverly Hilton Hotel in Beverly Hills, Calif. U.S. wireless carrier T-Mobile announced Wednesday, March 15, 2023, that it is buying prepaid wireless brand Mint Mobile, in which actor Ryan Reynolds is a part owner, as part of a cash-and-stock deal worth up to $1.35 billion. Photo by Richard Shotwell/Invision/AP, File

T-Mobile US Inc said on Wednesday it would buy Ka’ena Corp, the owner of Ryan Reynolds-backed budget service provider Mint Mobile, for up to US$1.35 billion, as the telecom operator looks to maintain growth in a competitive market.

The deal will allow T-Mobile to tap a larger share of the pay-as-you-go customer base, whose numbers are expected to swell as credit-challenged people shy away from hefty monthly bills.

It will also provide a boost to T-Mobile’s business at a time when promotions from rivals Verizon and AT&T have driven up its churn rate, which refers to the percentage of customers who stop using a service.

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The agreement consists of 39 per cent cash and 61 per cent stock, with the final purchase price set to be decided by Ka’ena’s performance during certain periods before and after the closing of the deal that is expected later this year.

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The purchase will add slightly to T-Mobile’s core adjusted earnings, but is not expected to affect its outlook for the year.

“Over the long term, we’ll also benefit from applying the marketing formula Mint has become famous for across more parts of T-Mobile,” said Mike Sievert, Chief Executive Officer of T-Mobile.

Mint is known for its marketing tactics that often feature part-owner Reynolds. At the onset of the pandemic in 2020, the “Deadpool” star left a voicemail for users informing them that the company had given them unlimited free data.

Reynolds’ portfolio also includes British soccer club Wrexham and Aviation American Gin, which was sold to Diageo for about $610 million in 2020. The actor, however, maintains “ongoing ownership interest” in Aviation Gin.

(Reporting by Akash Sriram in Bengaluru; Editing by Saumyadeb Chakrabarty and Uttaresh Venkateshwaran)

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