(Reuters) – Sunrise Communications Group AG has agreed to buy Liberty Global PLC’s Swiss business UPC Switzerland in a 6.3 billion Swiss francs ($6.29 billion) deal, the mobile phone and internet services company said on Wednesday.
FILE PHOTO: The logo of broadband and telecommunications provider UPC Schweiz is seen at its headquarters in Wallisellen, Switzerland February 6, 2019. REUTERS/Arnd Wiegmann
The purchase strengthens Sunrise’s position as Switzerland’s second largest telecoms company, and is another European sale by Liberty Global which divested its Austrian business to T-Mobile Austria last year.
Sunrise will pay Liberty Global 2.6 billion Swiss francs in cash, and assume 3.6 billion Swiss francs of UPC’s debt, the company said in a statement.
Analysts have said a tie-up makes sense, given that Sunrise and UPC’s fixed and mobile services would make the combined entity a stronger rival to the dominance of state-controlled Swisscom.
Zurich-based Sunrise confirmed earlier this month it was negotiating to buy the UPC business which has 1.1 million TV customers, amid falling subscriptions, and 138,000 mobile phone clients in Switzerland.
Liberty Global, set up by U.S. cable pioneer John Malone, has been selling off its assets in the last year. The U.S. listed company is also awaiting European Union approval for its sale of its assets in Germany and eastern Europe to Vodafone for $21.8 billion.
In December, Liberty Global said it would sell its DTH satellite TV operations, which serves four eastern European markets, to M7 Group for a total enterprise value of about 180 million euros ($206.41 million)
The deal is expected to close in the second half of 2019 and add to Sunrise’s equity free cash flow per share from the first year after that.
Credit Suisse, JPMorgan and LionTree served as financial advisers to Liberty Global, while Deutsche Bank, UBS and Morgan Stanley advised Sunrise.
($1 = 1.0014 Swiss francs)
Reporting by Ismail Shakil in Bengaluru and John Revill in Zurich; editing by Grant McCool