Previous post Next post

Telecom operator Sunrise to pay up for failed deal

Sunrise had planned to acquire UPC for CHF6.3 billion. (© Keystone / Christian Beutler)

Following shareholder pushback, Swiss telecom operator Sunrise has cancelled the purchase contract for the cable network operator UPC, officially burying the controversial deal. This is another failed attempt to challenge industry leader Swisscom.

“Yesterday evening we cancelled the purchase agreement,” Sunrise CEO Olaf Swantee said on Wednesday. “The deal proposed by management to our shareholders is dead. It no longer exists”.

In October, Sunrise abruptly put off a shareholder meeting after it became clear that the majority of Sunrise shareholders were not behind the capital increase to finance the CHF6.3 billion ($6.3 billion) acquisition of UPC, according to Swantee.

One key source of resistance was the CEO of the world’s largest cable network group Freenet, which holds around a quarter of the second-largest Swiss telecom provider. Freenet CEO Christoph Vilanek criticised the purchase price and argued the deal was detrimental to Sunrise shareholders.

Sunrise communications said on Wednesday that it faces a hit of up to CHF125 million from its failed bid. This includes a CHF50 million breakup fee and CHF19 million in underwriting fees and already-incurred integration costs of CHF24 million.

This represents another failed attempt to create a stronger challenger in the Swiss telecom market for Swisscom, the majority state-owned industry leader. Nine years ago, the Federal Competition Commission forbid a planned merger of Sunrise and French telecom operator Orange for competitive reasons. However, the antitrust authorities had no objections to the purchase of UPC by Sunrise.

UPC owner Liberty Global has left the door open for discussion in the future and in a statement, indicated that it hopes that a new deal for the Swiss cable operator can be reached.  “We look forward to continuing our conversations with either the board or Freenet about a potential transaction that creates significant value for both sets of shareholders and Swiss consumers,” said Liberty CEO Mike Fries.

Full story here Are you the author?
About Swissinfo
Swissinfo
SWI swissinfo.ch – the international service of the Swiss Broadcasting Corporation (SBC). Since 1999, swissinfo.ch has fulfilled the federal government’s mandate to distribute information about Switzerland internationally, supplementing the online offerings of the radio and television stations of the SBC. Today, the international service is directed above all at an international audience interested in Switzerland, as well as at Swiss citizens living abroad.
Previous post See more for 3.) Swissinfo Business and Economy Next post
Tags: ,,

Permanent link to this article: https://snbchf.com/2019/11/telecom-operator-sunrise-pay-failed-deal/

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This site uses Akismet to reduce spam. Learn how your comment data is processed.