Sprint Nextel (NYSE:S) announced on Wednesday that it will acquire wireless spectrum and 585,000 customers in Midwestern states from U.S. Cellular (NYSE:USM).
The deal, worth $480 million, will expand Sprint’s network coverage across Illinois, Missouri, Ohio, Indiana and Michigan, the Associated Press noted.
Investors weren’t impressed with the news. Shares of U.S. Cellular plunged more than 7% in Wednesday morning trading, while Sprint shares slipped more than 1%.
In the third quarter, U.S. Cellular posted income that fell 43% compared to last year, on sales that climbed 3%. The company indicated that it would concentrate on its core markets. The cellular customers sold to Sprint account for about 10% of U.S. Cellular’s total customers.
If the deal receives the OK from regulators, it will close in mid-2013.
Last month, Japan’s Softbank (PINK:SFTBY) announced that it will acquire a 70% stake in Sprint, which has struggled to compete with larger U.S. wireless service providers AT&T (NYSE:T) and Verizon (NYSE:VZ).