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Shareholders in mobile operator Sunrise are drawing the line with the acquisition by UPC. You have to know that about business.
Because it is? Liberty Global, the owner of the cable network operator UPC, originally wanted to withdraw from Switzerland. Nothing will come of the plan: the UPC will take over Sunrise for 6.8 billion francs. Shareholders of the mobile phone provider have agreed to withdraw the shares from the stock exchange. In addition, they have elected the representatives of the UPC in the Board of Directors and in the Presidium until the General Meeting of Shareholders. The merger is thus concluded.
How did that happen? Sunrise’s most important shareholders had already spoken in favor of the takeover bid in advance. The price was ok. The procedure was correct. The competition authorities have also already approved the acquisition. “It’s the end of a long history of suffering that everyone wants to overcome,” says Philip Meyer, SRF’s business editor. No one had a reason to block the acquisition. By the October 28 deadline, UPC had already offered 96 percent of Sunrise’s shares for purchase.
Why only now? Sunrise’s originally planned acquisition of UPC failed because Sunrise shareholders feared for their money. “That is no longer the case: you are receiving money,” Meyer explains the new situation. After the failed merger, Liberty Global was in a difficult situation: “Basically, they had a product that cannot be competitive in the medium or long term, since UPC is a pure cable provider without a cellular network.”
What else would have happened? To remain competitive with Sunrise and Swisscom, UPC would have had to make massive investments with no real prospect of success. Now Liberty Global has made a large one-time investment, “in the hope of building a medium-term company that can be sold again for a good price,” estimates Meyer.
What does that change? This merger will make Sunrise and UPC a true full service provider. Until now, the two have been complementary companies. Sunrise is very strong in mobile communications and is also relatively advanced in expanding with 5G antennas in cooperation with Huawei. On the other hand, UPC is well positioned with the cable network, which relies on modern copper rather than fiber optics in the “last mile” from home connection to outlet.
“Together they bring the Internet, television and mobile telephony together and, in doing so, are practically on par with Swisscom,” Meyer says. The UPC has not yet announced when it will happen. UPC and Sunrise will coexist for a while, the new owner explained.
What does that mean for customers? Anyone now hoping that subscriptions will improve and prices will be cheaper will likely be disappointed, says the business editor. “Now there is a kind of duopoly.” Even if the startup UPC-Sunrise is still far behind Swisscom, the competitors are not going to be really crazy about the confrontation. The price war won’t be big, Meyer said. “Not because UPC-Sunrise can’t and probably won’t.”
