Liberty Global's $7.4 Billion Acquisition of Sunrise Communications Group

By Alexander Bergmüller (IE Business School), and Jack Briody (Columbia University)

 

Overview of the deal


Acquirer: Liberty Global

Target: Sunrise Communications Group

Total Transaction Size: $7.4bn

Announced date: August 11tth, 2020

Acquirer advisor: Credit Suisse, J.P. Morgan and LionTree Advisors

Target advisor: Homburger AG and Shearman & Sterling LLP

Liberty Global to acquire 100% of Sunrise Communications Group by Tender. The Denver-based company will pay CHF110 a share in cash to acquire Sunrise, which will be funded from Liberty Global’s cash reserves and debt. The offer represents a 32% premium to the 60-day volume weighted average price per share of CHF83.17 through August 11, 2020 and puts Sunrise’s equity value at CHF5.0 billion with a total enterprise value of CHF6.8 billion. Sunrise's Board of Directors is unanimously recommending that its shareholders accept the offer, and Freenet AG -- Sunrise’s largest shareholder, which holds approximately 24% of Sunrise’s capital -- has signed a binding, unconditional commitment to tender its shares at the offer price. Sunrise is therefore expected to become a wholly owned subsidiary within the Liberty Global group of companies.

“It wasn’t a question of ‘is this a good deal?’ only a matter of how it would get done”- Liberty Global CEO Mike Fries


Company Details: Liberty Global


Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is one of the world’s leading converged video, broadband and communications companies, with operations in 6 European countries under the consumer brands Virgin Media, Telenet and UPC. The company invests in the infrastructure and digital platforms that empower the customers to make the most of the digital revolution. The substantial scale and commitment to innovation enables Liberty Global to develop market-leading products delivered through next-generation networks that connect 11 million customers subscribing to 25 million TV, broadband internet and telephony services.


Founded in 2005, headquartered in Denver, Colorado, U.S.

CEO: Mike Fries

Number of employees: 21,000

Market Cap: $ 12.9bn (as of August 15th, 2020)

EV: $2.4bn

LTM Revenue: $11.4bn

LTM EBITDA: $4.8bn

LTM EV/Revenue: 0.2x

LTM EV/EBITDA: 0.5x


Company Details: Sunrise Communications AG

Sunrise Communications AG (commonly known as Sunrise), is a Swiss telecommunications provider based in Zurich. The company has 2.99 million customers, making it the second-largest telecommunications company in Switzerland after Swisscom. It provides mobile, TV, and landline phone and internet services.


Founded in</