Liberty boss confident of green light from Weko

Thomas Meyer, Chairman of the Board of Directors of Sunrise, echoed the same sentiment, saying that the deal was basically the same as last year.

In the first attempt to marry Sunrise and UPC last year, Swiss competition regulators had granted approval without conditions or requirements. At the time, Sunrise wanted to take over UPC, but failed due to resistance from shareholders led by Germany's Freenet (Werbewoche.ch reported).

The industrial logic of the deal is undeniable, Fries said. Consolidation in the Swiss market is necessary, he said. Together, UPC and Sunrise would become a more potent challenger to market leader Swisscom. The combination of the new ultra-fast mobile technology 5G and UPC's cable network could provide 90 percent of households with Internet speeds of up to one gigabit per second next year, he said. In addition, the joint venture has growth opportunities.

Extent of job cuts unclear

Fries expects annual synergies of 275 million Swiss francs. They are to be leveraged, for example, in IT or the elimination of redundancies after integration. There are also savings opportunities in operating costs. It should be possible to realize 70 to 80 percent of the synergies in three years. The full synergies would be realized after four to five years.

Fries did not want to disclose how many jobs would be cut, saying that the planning had not yet reached that stage. Who will be the new head of the merged telecom provider has also not yet been decided, he said. "We want a management team with the best people from both sides," Fries said. He also said no decision has been made yet on the brands. However, Fries said he praised Sunrise as an "exceptional brand," while UPC was a "strong brand" that had been burdened in the past.

Fiber optic construction with Salt on ice

As a result of the new wedding effort, the recently agreed cooperation between Sunrise and Salt for fiber rollout will be put on hold, Meyer said. Sunrise and Salt had set up the joint venture Swiss Open Fiber in May to lay 1.5 million new fiber-optic lines to households (FTTH) over the next five to seven years.

This would mean that over 70 percent of the population would be connected to the ultra-fast data highways. That would be about twice as many as today. Both wanted to invest 3 billion Swiss francs in the expansion.

No resistance expected from shareholders

The move to resume wedding talks came from Liberty Global. "We're sitting on $10 billion in liquidity," Fries said. They want to invest that, he said. Given Sunrise's performance, the logic of the deal and the need for market consolidation in Switzerland, they have now made the offer to buy, he said. Sunrise shareholders are to receive CHF 5 billion in cash. Sunrise's enterprise value is 6.8 billion francs, it said. The negotiations took less than a month.

Fries and Meyer do not expect any resistance from shareholders as they did last year: they had brought major shareholder Freenet on board right from the start. And unlike then, the deal will not be put to a public vote at a shareholders' meeting, but each shareholder will decide for himself whether he wants to accept the offer, said Meyer.

In the last transaction, Sunrise was the buyer, Fries said. At the time, he said, Freenet didn't like the terms. "Now Freenet is the seller." The entire board of directors, including Freenet, unanimously backed the purchase offer, he said.

After the takeover, Sunrise is to be delisted from the Swiss stock exchange SIX. A return, however, is an option for Liberty Global CEO Fries: "The chances of that are very good. We have no problem with listed companies, our subsidiary in Belgium is a listed company." He said he was looking at this option once UPC and Sunrise had merged and business was good.

Syndicom welcomes merger, but demands social plan for job cuts

The Syndicom trade union is calling for a social plan for job cuts in the wake of the merger of UPC and Sunrise. "Due to the resulting synergies and the tense economic situation, job cuts are unavoidable," the union said in a statement on Wednesday.

As the social partner of both Sunrise and UPC, Syndicom will be closely involved in the merger. All the more reason to strive for a social plan that gives those affected sufficient time to find equivalent follow-up solutions. Syndicom will therefore place particular emphasis on the further training of those affected during the social plan negotiations, according to the communiqué. Syndicom is calling for the merger to be structured in a socially responsible way.

Syndicom welcomes the planned acquisition of Sunrise by UPC owner Liberty Global: "The takeover and subsequent merger will strengthen the Swiss telecommunications market and secure jobs in the long term." This would create a strong company that would make a significant contribution to the permanent network expansion. (SDA)