Liberty Global adds Swiss Sunrise to British Virgin in $7bn

Liberty Global adds Swiss Sunrise to British Virgin in $7bn deal

13 August 2020 | Alan Burkitt-Gray

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Nine months after Liberty Global ended discussions about selling its Swiss UPC cable unit to mobile operator Sunrise, Liberty itself has made an agreed bid for Sunrise.

Liberty Global says its bid values Sunrise at 6.8 billion Swiss francs (US$7.47 billion) – and its bid has the full support of Freenet, a German operator with a 24% stake in Sunrise.

It was Freenet’s opposition to Sunrise’s €5.5 billion bid for Liberty’s Swiss unit last year that helped scupper the deal, which saw Sunrise CEO Olaf Swantee leave the group.

Mike Fries (pictured), CEO of Liberty Global, said: “This powerful combination of 5G wireless and gigabit broadband will accelerate digital investment at a time when connectivity has never been more essential.”

In early 2019 Swantee told Capacity of Sunrise’s plan to build a fixed wireless network in Switzerland, using 5G kit from Huawei, to bring broadband to rural areas.

Fries 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.”

The deal mirrors a UK plan, with Liberty Global’s British cable unit Virgin Media due to merge with Telefónica’s O2 UK to create a fixed and mobile operator.

Fries implied that he’s looking for more such deals: “Even after this deal, and assuming completion of our recently announced UK transaction, we will continue to have approximately $7 billion of liquidity to drive value-creation for shareholders.”

Since leaving Sunrise, Swantee has become an adviser to investment group Warburg Pincus, which is investing £400 million in a London fibre-to-the-home (FTTH) company, Community Fibre. Swantee will become executive chairman of the London company as soon as the deal is completed.