CVC Capital to buy Swiss mobile phone firm Sunrise for $3.25 billion

Private equity firm CVC Capital Partners yesterday said that it will buy Swiss mobile phone company Sunrise, owned by Danish telecom firm TDC for €2.5 billion ($3.25 billion).

The sale will allow TDC's majority owner's private equity firms Blackstone Group, Kohlberg Kravis Roberts & Co, Providence Equity Partners and Apax Partners to proceed with the long-awaited initial public offering before the end of the year.

The private-equity consortium acquired a majority stake in TDC in 2006 for about $15 billion including debt, but ATP, Denmark's biggest pension fund, refused to sell its stake, leading to only 12 per cent of TDC's stock being listed on the Copenhagen Stock Exchange. 

This is the second time the private equity firms are trying to hive off Sunrise after the Swiss regulator blocked the proposed sale of Sunrise to France Telecom's Orange in April 2010 on the ground that the merger would create a ''dominant position'' and reduce consumer choice. (See: Swiss regulator blocks France Telecom's €1.5 billion TDC merger)

Sunrise is Switzerland's second-largest telecom operator after the Swiss government-controlled Swisscom, which has over 1.9 mobile and 600,000 broadband customers and controls about 20 per cent of the Swiss mobile-phone market.

The sale of Luxemburg-based Sunrise to CVC Capital for €2.5 billion is far less than the €4.7 billion paid by TDC for Sunrise during the telecom upswing in 2000, but the €2.5-billion price tag is the biggest European buyout since 2008.