Liberty Global has reached a binding agreement to sell its Swiss subsidiary, UPC Switzerland, to Sunrise Communications Group, in a deal valuing the Swiss unit at CHF 6.3 billion, according Telecompaper. Liberty Global expects net cash proceeds from the sale of CHF 2.6 billion, which will be used for general corporate purposes. The deal is expected to close before end-2019.
As of end-2018, the UPC Switzerland network passed 2.3 million homes, serving 1.1 million customers who subscribed to 1.1 million video, 700,000 broadband and 520,000 voice services. The company revenues for 2018 of CHF 1.296 billion, down 3.7 percent as it struggled to hold onto customers in the highly competitive Swiss market.
The combined UPC/Sunrise group will be the No 2 player in mobile, TV, fixed broadband and fixed voice in the Swiss market, creating a new fixed-mobile challenger to market leader Swisscom. Severina Pascu, CEO of UPC Switzerland, said the merger recognises the growing importance of converged fixed-mobile offers in the Swiss market. "The merger of the two companies will allow for increased investment and additional innovation for the benefit of Swiss retail and business customers."
As part of the deal, Liberty Global will provide Sunrise with certain transitional services for a period of up to five years following completion. These include network and IT-related functions, with the annual charge for the services depending on the actual level of services required.
