Liberty Global strikes $7.4bn Sunrise deal
November 2020 | DEALFRONT | MERGERS & ACQUISITIONS
Financier Worldwide Magazine
November 2020 Issue
In a landmark deal for the Swiss telecommunications sector, multinational telecommunications company Liberty Global is to acquire Switzerland-based telecommunication services provider Sunrise Communications Group AG in an all-cash tender offer valued at $7.4bn.
Under the terms of the transaction agreement, the acquisition is to be funded through a combination of Liberty Global’s existing cash and proceeds from new debt issuance. The acquisition follows Sunrise’s failed attempt in October 2019 to acquire UPC Switzerland, which is owned by Liberty Global.
The combination will create the leading national converged challenger in Switzerland. Together, the combined business would have 2.1 million mobile post-paid subscribers, 1.2 million broadband subscribers and 1.3 million TV subscribers, reflecting approximately 30 percent market share in each segment.
Furthermore, the combined business will be strongly positioned to continue its network roll-out including 5G and future technologies, supporting a range of new and enhanced products and services.
“The industrial logic of this merger is undeniable, but the real winners are Swiss consumers and businesses,” said Mike Fries, chief executive 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.”
One of the world’s leading converged video, broadband and communications companies, with operations in six European countries under the consumer brands Virgin Media, Telenet and UPC, Liberty Global invests in the infrastructure and digital platforms that empower its customers to make the most of the digital revolution.
“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,” continued Mr Fries. “We look forward to welcoming Sunrise employees to the Liberty and UPC family and congratulate them and the board on their success.”
Sunrise’s board of directors is unanimously recommending that its shareholders accept the offer, while Freenet AG, Sunrise’s largest shareholder, which holds approximately 24 percent of Sunrise’s capital, has signed a binding, unconditional commitment to tender its shares at the offer price.
“Sunrise has delivered on its quality-focused strategy and built one of the best mobile networks worldwide,” said Andre Krause, chief executive of Sunrise. “We have successfully gained market share in all our businesses, underpinned by our strong focus on customer centricity, service excellence and innovation. We are very proud of what our employees have achieved and believe that the combination with Liberty Global will enable the combined company to become the leading fully converged challenger in the market.”
Credit Suisse International, J.P. Morgan and LionTree Advisors are acting as financial advisers to Liberty Global, and Homburger AG and Shearman & Sterling LLP are acting as legal advisers to Liberty Global.
The closing of the transaction will occur following receipt of requisite regulatory approvals, which the parties expect to receive around year end, and satisfaction of other customary closing conditions.
Mr Fries concluded: “This transaction is another significant step on our path to create fixed-mobile champions in all of our core markets, crystallising the value of our superior broadband networks and driving long-term, sustainable free cash flow growth.”
© Financier Worldwide
BY
Fraser Tennant