Liberty Global acquiring Sunrise for $7.4bn
Today, Liberty Global has announced that it will be purchasing Swiss operator Sunrise Communications for a sum of 6.8 billion Swiss francs (around $7.4 billion).
The deal comes as something of a role reversal for the two companies; just last year, Sunrise was preparing to spend just over $6 billion to purchase Swiss cable unit UPC from Liberty Global. However, the deal ultimately fell through due to Sunrise’s largest shareholder, Freenet, disagreeing with some of the terms.
However, Freenet has no such qualms about being bought out by the American company, and has signed a binding, unconditional agreement to sell the shares for the agreed price, according to Liberty Global.
The deal will have a significant impact on the Swiss market. Incumbent Swisscom has long been the dominant force in the country, controlling around 60% of the mobile market; Sunrise, while the second largest player, controls only around 25%. However, bolstering this second place contender with the final incorporation of UPC’s cable assets could turn the merged entity into a major threat for Swisscom.
“The industrial logic of this merger is undeniable,” said the chief executive of Liberty Global, Mike Fries. “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.”
Switzerland is not the only market in Europe to be experiencing significant changes courtesy of Liberty Global. The UK was rocked earlier this year with the announcement of a £31 billion merger of Liberty Global’s Virgin Media with Telefonica’s O2. Combining the fixed and mobile assets of these two companies will create a new UK powerhouse that many are hoping can grow to challenge incumbent BT.
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