French telecoms entrepreneur Xavier Niel has struck a deal with private equity firm Apax Partners to buy Orange Switzerland for SFr2.8bn (US$2.9bn).
Niel, who founded Iliad which operates French wireless challenger Free, is buying the Swiss mobile…
French telecoms entrepreneur Xavier Niel has struck a deal with private equity firm Apax Partners to buy Orange Switzerland for SFr2.8bn (US$2.9bn).
Niel, who founded Iliad which operates French wireless challenger Free, is buying the Swiss mobile operator through NJJ Capital, his private holding company.
Apax bought Orange Switzerland from French incumbent Orange in 2012 for €1.6bn, beating off competition from a number of other interested parties including Niel.
That sale followed the Swiss antitrust authority blocking Orange’s proposed merger of Orange Switzerland with CVC Capital Partners-owned Sunrise, which would have taken the market down from three operators to two.
Orange had 20% of the Swiss mobile market as of June this year, just behind Sunrise with 21%, but well short of incumbent Swisscom’s 59% share.
Speaking to TelecomFinance in November, Swisscom’s CFO Mario Rossi said there was a good business case for an Orange-Sunrise merger and the sector regulator would be in favour, but that the competition regulator was less predictable.
Niel recently said he is not interested in consolidating French mobile, in spite of the market crying out for it since Iliad sparked a price war in 2012. He instead temporarily turned his gaze to the US, where his ambitious bid to buy T-Mobile US fell short of Deutsche Telekom’s asking price earlier this year.
Commenting on his latest acquisition, Niel said he and his team had been watching the operator’s progress very closely since Apax acquired it and was impressed with how it had been modernised.
Gabriele Cipparrone, a partner at Apax, said that Orange Switzerland had been a very successful investment for the firm.
“We have no doubt that NJJ Capital is the right new partner for the company as they embark on the next stage of the company’s journey and continue as a major challenger in the Swiss mobile market.”
The transaction is subject to regulatory approval and expected to close by the end of Q1 2015.
Niel was advised by Lazard, the same bank which worked on his takeover of Monaco Telecom earlier this year and on his ill-fated attempt to buy T-Mobile US.
BNP Paribas also served as M&A adviser to NJJ Capital. Its lawyers were Niederer Kraft & Frey, Shearman & Sterling, and MNKS. KPMG provided accounting advice.
Credit Suisse acted as Apax’s M&A adviser. Its legal team was made up of Simpson Thacher & Bartlett and Bar & Karrer Ltd. PwC served as Apax’s accountant.
