Liberty Global to Sell UPC Switzerland to Sunrise

  • Transaction values UPC Switzerland at CHF 6.3 billion ($6.3
    1) or 10x Estimated 2019 Adjusted
    Segment OCF
  • Net cash proceeds3
    expected to be CHF 2.6 billion
    ($2.6 billion
  • Combined business will create leading challenger in competitive
    quad play market
  • Transaction expected to close prior to year-end 2019

DENVER, Colorado–(BUSINESS WIRE)–Liberty Global plc (“Liberty Global”) (NASDAQ: LBTYA, LBTYB and LBTYK)
today announced that it has reached a binding agreement to sell its
Swiss operation, UPC Switzerland, to Sunrise Communications Group AG
(“Sunrise”). At December 31, 2018, UPC Switzerland’s network passed 2.3
million homes and served 1.1 million customers who subscribed to 1.1
million video, 700,000 broadband and 520,000 voice services.

The transaction will create the leading converged challenger in the
market with scale across all elements of the quad play bundle. As the #2
player in mobile, TV, fixed broadband and fixed voice, the combined
company will have the scale to drive innovation, invest in new services
and pursue growth with competitively priced offers.

Liberty Global will sell UPC Switzerland for a total enterprise value of
CHF 6.3 billion ($6.3 billion1) on a U.S. GAAP basis. Sunrise
will acquire the business inclusive of the UPC Holding borrowing group’s
existing senior and senior secured notes4 and associated
derivatives (together, the “Notes”) and certain other debt items, which
have an aggregate value equal to approximately CHF 3.7 billion ($3.7
billion1) at December 31, 2018. The net proceeds to Liberty
Global, which will be paid in cash, are expected to be CHF 2.6 billion3
($2.6 billion1), subject to customary other liabilities and
working capital adjustments at completion.

The enterprise value implicit in the sale price represents a multiple of
10x UPC Switzerland’s currently estimated 2019 adjusted segment
operating cash flow (“Segment OCF”2), as otherwise
customarily defined by Liberty Global, or approximately 22x UPC
Switzerland’s estimated 2019 operating free cash flow (“OFCF”)5.
Closing of the transaction is subject to regulatory approval, which is
expected prior to year-end 2019, and approval by Sunrise’s shareholders
with respect to an associated capital increase.

Mike Fries, Chief Executive Officer of Liberty Global, said, “Today’s
announcement further validates our strategy of building or enabling
national champions in our core European markets. After 13 years of
investment, innovation and growth, UPC Switzerland will combine with
Sunrise to form a strong challenger in the Swiss market. This is a great
moment for the Swiss consumer as network quality, product innovation and
customer experience is at the heart of both companies. We are extremely
proud of what we have achieved in this market, and are thrilled for our
shareholders who will benefit from yet another example of value
creation. After an investment of $1.6 billion in 2005, we will have
realized at closing $6.5 billion of dividends and equity proceeds, or
nearly four times our capital in this market.”

The net proceeds from the sale are expected to be used for general
corporate purposes.

Liberty Global has agreed to provide certain transitional services to
Sunrise for a period of up to five years following completion. Such
transitional services principally comprise network and information
technology-related functions. The annual charges for such transitional
services will depend on the actual level of transitional services
required by Sunrise.

Credit Suisse, J.P. Morgan and LionTree acted as financial advisers to
Liberty Global on the transaction.


This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding UPC Switzerland’s 2019 estimated adjusted
Segment OCF and OFCF, expected net proceeds, the anticipated closing of
the sale of UPC Switzerland, the expected use of net proceeds and other
information and statements that are not historical fact. These
forward-looking statements involve certain risks and uncertainties that
could cause actual results to differ materially from those expressed or
implied by these statements. These risks and uncertainties include the
ability to obtain regulatory approval for the transaction, approval by
Sunrise’s shareholders, our and Sunrise’s ability to achieve other
customary closing conditions for the transaction, as well as other
factors detailed from time to time in Liberty Global’s filings with the
Securities and Exchange Commission including our most recently filed
Form 10-K. These forward-looking statements speak only as of the date of
this release. Liberty Global expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to UPC Switzerland’s
2019 estimated adjusted Segment OCF and OFCF or any other
forward-looking statement contained herein to reflect any change in
Liberty Global’s expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.


Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is the world’s largest
international TV and broadband company, with operations in 10 European
countries under the consumer brands Virgin Media, Unitymedia, Telenet
and UPC. We invest in the infrastructure and digital platforms that
empower our customers to make the most of the video, internet and
communications revolution. Our substantial scale and commitment to
innovation enable us to develop market-leading products delivered
through next-generation networks that connect 21 million customers
subscribing to 45 million TV, broadband internet and telephony services.
We also serve 6 million mobile subscribers and offer WiFi service
through 12 million access points across our footprint.

In addition, Liberty Global owns 50% of VodafoneZiggo, a joint venture
in the Netherlands with 4 million customers subscribing to 10 million
fixed-line and 5 million mobile services, as well as significant
investments in ITV, All3Media, ITI Neovision, LionsGate, the Formula E
racing series and several regional sports networks.

For more information, please visit


1   Convenience translation based on USD/CHF spot rate of 1.00.
2 For the purpose of the sale price multiple calculation, the
estimated 2019 Segment OCF of UPC Switzerland has been reduced by
CHF 32 million, which represents the allocable estimated net amount
of transitional services (excluding amounts related to costs
expected to be capitalized by Liberty Global) to be provided by
Liberty Global to Sunrise during the first year following completion
of the transaction.
3 Net cash proceeds represent the estimated cash proceeds to be
received by Liberty Global after adjustments for certain debt items,
including vendor financing and capital leases, based on December 31,
2018 balances.
4 UPC Switzerland is part of the UPC Holding borrowing group. As the
transaction is structured, a change of control will not be triggered
under the Notes. The UPC Holding borrowing group’s existing Term
Loan AR (approximately $1.6 billion at December 31, 2018) is
expected to be repaid in full at or prior to closing. The amount of
the repayment is not included in the determination of net proceeds,
as disclosed herein.
5 OFCF is defined as Segment OCF less property and equipment
additions, as customarily defined by Liberty Global. For the purpose
of the sale price multiple calculation, UPC Switzerland’s estimated
2019 Segment OCF has been adjusted as described in footnote 2, and
its estimated 2019 property and equipment additions have been
increased by CHF 62 million, which represents the estimated
incremental net amount of transitional services related to property
and equipment additions that UPC Switzerland would incur if it were
a stand-alone entity.


Liberty Global plc
Investor Relations:
Coates, +44 20 8483 6333
John Rea, +1 303 220 4238
Halters, +1 303 784 4528

Corporate Communications:
Bruce, +1 303 220 4202
Matt Beake, +44 20 8483 6428

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