Wednesday 12 August 2020 9:59 am

Liberty Global snaps up Swiss telecoms group Sunrise for $7.4bn

Liberty Global today said it has acquired Swiss telecoms group Sunrise Communications in a deal worth 6.8bn Swiss francs ($7.4bn).

Liberty, which is run by US cable mogul John Malone, said it had agreed to buy Sunrise for 110 Swiss francs a share, representing a 32 per cent premium on the company’s average share price in the 60 days to 11 August.

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Sunrise’s board has unanimously recommended the offer while Germany’s Freenet — the largest shareholder with a 24 per cent stake — has signed a binding, unconditional commitment to tender its shares at the offer price.

The deal comes less than a year after Sunrise’s 6.3bn franc attempt to take over Liberty’s Swiss cable business UPC fell through last year.

The takeover collapsed following opposition from shareholders including Freenet amid concerns it was too expensive and strategically flawed.

Today’s agreement is the latest in a string of deals for the US cable giant, which earlier this year agreed a tie-up with Telefonica to merge Virgin Media with O2.

It also marks further consolidation in the telecoms market as companies look to bring together broadband and mobile assets.

“The industrial logic of this merger is undeniable,” said Liberty Global chief executive Mike Fries.

“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.”

Liberty said the tie-up would create a significant new converged challenger in the Swiss market, which is dominated by state-controlled Swisscom.

The combined business will boast 3.1bn francs in revenue, 2.1m post-paid subscribers, 1.2m broadband subscribers and 1.3m TV subscribers.

Read more: Arqiva’s £2bn telecoms takeover cleared by competition watchdog

This represents a market share of roughly 30 per cent in each sector, Liberty said.

“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,” Fries added.

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