Sunrise’s CHF 500m Swiss Towers sale lights up M & A market

Annual Review 2017-2018

June 2018

In one of the most prestigious deals in the Swiss M&A market last year, a cross-border CMS team advised Sunrise, the number two Swiss telecommunications operator, on the sale of Swiss Towers AG for CHF 500m.

The buyer was a consortium consisting of the main Spanish independent operator of wireless communications infrastructure Cellnex Telecom, Swiss Life Asset Management AG and Deutsche Telekom Capital Partners.

The transaction involved the carve-out and sale of the passive mobile network infrastructure which mainly comprised steel and concrete telecom towers. The active network infrastructure – the antennae – remained with Sunrise.

Sunrise has entered into a complex long-term service agreement with Swiss Towers AG for the provision of tower infrastructure services. It is the first telecommunications provider in Switzerland to enter into such a transaction. CMS Zurich partner Clemens von Zedtwitz explained, “The ‘towering as a service’ agreement is innovative and may have a strong advantage over the customary ‘sale and leaseback’ structures from an accounting or financial point of view.”

In the run-up to this transaction, 2,239 telecom towers and their related contracts were carved out into Swiss Towers AG in March 2017. CMS Zurich partner Alain Raemy said, “The carve-out was done as a transfer of enterprise, one of the very few spin-outs pursuant to the Swiss Merger Act. Had we not structured it in this way, then the specific approval of each landlord would have been required before any deal could have been considered. This would have created unfeasible time delays.”

CMS lawyers in Zurich and Munich worked on the deal. CMS also advised Sunrise on the commercial and merger clearance issues associated with the transaction.

These kinds of telecoms deals are, depending on the market, rare and will only be seen once or twice in a national market due to the scale of the infrastructure.
Oliver Thurn and Jens Neitzel, Partners, CMS Munich

In a statement Olaf Swantee, CEO of Sunrise, explained the thinking behind the deal. “We are absolutely proud to be the first Swiss operator to enter such a partnership. It enables us to continue our network and innovation leadership. The
new partnership will enable us to focus even stronger on the key differentiating elements of our active network infrastructure to deliver the defect-free network and set new industry standards in the Swiss mobile market.”

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