Sunrise Communications Group AG has announced that it has entered into a definitive agreement with a consortium led by Cellnex Telecom S.A., and including Swiss Life Asset Managers (SLAM) and Deutsche Telekom Capital Partners (DTCP)

The transaction involves the sale of Swiss Towers AG, which owns a portfolio of 2,239 telecom towers in Switzerland for a consideration of CHF500 million (US$514 million).

Completion of the Transaction is subject to merger control clearance and the conclusion of (i) transitional service agreements (i.e. a Service Level Agreement and a Transitional Services Agreement) based on which Sunrise will provide certain (transitional) services to Swiss Towers, as well as (ii) a build-to-suit agreement based on which Sunrise is subcontracted to build new telecom towers.

To facilitate this transaction, 2,239 telecom towers located throughout Switzerland and associated contracts were carved out in March into a separate legal entity, Swiss Towers. This relates to passive network infrastructure, i.e. mainly steel and concrete. All of the active mobile network infrastructure remains with Sunrise and enables Sunrise to focus even more on improving the quality of its mobile services for its customers. 

The sellers and Sunrise have entered into a long-term service contract regarding the provision of tower infrastructure services, and will enter into a new build-to-suit program comprising of new macro sites and small cells. This new compelling partnership with the sellers extends Sunrise's work with leading partners to deliver the long-term strategy of offering best network quality. For instance, Sunrise’s partnership with Huawei contributed to winning the ‘connect’ mobile network test in 2016.

Following the closing of the transaction, Sunrise will use CHF450 million of the cash proceeds to pay down debt and improve its financial position, with the aim of achieving an investment grade credit rating in the near term.

Olaf Swantee, CEO of Sunrise, said:

“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."

As we reported last September, Cellnex acquired a package of 230 cell towers distributed throughout France from Bouygues Telecom.