August 12, 2020
Having tried and failed to do it the other way around, the parent of UPC Switzerland has decided to take Swiss consolidation into its own hands.
Liberty Global has offered a 32% premium to the share price of Sunrise, which values the whole acquisition at CHF 6.8 billion ($7.4 billion). The Sunrise board and 24% shareholder Freenet have already given it the green light, so the only remaining potential obstacles are Liberty’s own shareholders and regulators.
Last year they tried this move the other way around, with Sunrise moving to acquire UPC Switzerland from Liberty Global for $6.3 billion. However Freenet and other shareholders didn’t fancy the move and blocked it. Liberty Global presumably made sure Freenet was 100% on-board before making this bid.
“The industrial logic of this merger is undeniable, but the real winners are Swiss consumers and businesses,” said Mike Fries, CEO of Liberty Global. “This powerful combination of 5G wireless and gigabit broadband will accelerate digital investment at a time when connectivity has never been more essential.
“Fixed-mobile convergence is the future of the telecom sector in Europe, and now Switzerland will have a true national challenger to drive competition and innovation for years to come. We look forward to welcoming Sunrise employees to the Liberty and UPC family and congratulate them and the board on their success.
“This transaction is another significant step on our path to create fixed-mobile champions in all of our core markets, crystallizing the value of our superior broadband networks and driving long-term, sustainable free cash flow growth. Even after this deal, and assuming completion of our recently announced UK transaction, we will continue to have approximately $7 billion of liquidity8 to drive value-creation for shareholders.”
UPC Switzerland is primarily a cable player with a bit of MNVO action, while Sunrise is mobile, so this move is similar to BT’s acquisition of EE in the UK. They will be hoping Swiss regulators view it in the same way as it shouldn’t be removing a significant player from either the fixed-line or mobile markets. Liberty Global and Sunrise have published the obligatory M&A propaganda site here.
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