The Liechtenstein government strongly recommends the nation’s parliament approve Swisscom’s proposed acquisition of a 75% stake in Telecom Liechtenstein before the Swiss incumbent’s offer expires at the end of June.
A government spokesperson told…
The Liechtenstein government strongly recommends the nation’s parliament approve Swisscom’s proposed acquisition of a 75% stake in Telecom Liechtenstein before the Swiss incumbent’s offer expires at the end of June.
A government spokesperson told TelecomFinance the administration favours the deal, first announced in September last year, as Vaduz-based Telecom Liechtenstein has been “hard pressed by the continued erosion of margins and the small market”, noting that there are only about 16,000 households in the municipality.
“Swisscom guarantees a strong and reliable partnership,” the spokesperson said. “Liechtenstein’s government strongly recommends the planned business transaction and is hoping for a good outcome.”
The Liechtenstein Parliament is set to discuss the proposed deal, which would create a new company called Swisscom (Liechtenstein), during its session late next week. A final decision is expected by the end of June.
The spokesperson said that, as Swisscom has already invested “a lot of resources” in the preparation of the deal, it wants to close it as soon as possible.
“Therefore a final decision by Liechtenstein’s parliament by the end of June is necessary.”
A spokesperson for Swisscom said the company hopes the deal will be approved this summer, noting that “the contract is ready to be signed”.
The spokesperson said “a clear political decision about the further process” is needed before the end of June or the company will have to re-evaluate the situation.
Swiss newspaper Corriere Del Ticino recently cited Prime Minister Adrian Halser as saying that, given Telecom Liechtenstein’s current difficulties, it is time for the company to “return to the fold”. According to the report, the telco is worth CHF23m (US$24.1m).
Last September, the Swiss incumbent announced it had signed a declaration of intent with the Principality of Liechtenstein to acquire the controlling stake in Telecom Liechtenstein and intended to incorporate it within its own business.
The deal value has not been disclosed; however Swisscom CEO Carsten Schloter told TelecomFinance late last year that it was “small” in size, adding that the investment would help “to solve a political issue in a country that’s very close to Switzerland”.
Swisscom intends to take over the target’s telecoms business as well as infrastructure currently belonging to the Liechtenstein Power Company (LKW). Telecom Liechtenstein’s cable network activities and Swiss unit Deep will not be included in the deal.
In its September statement, Swisscom said it considers the deal a “long-term investment”, adding that it has the support of both the Liechtenstein government and the Swiss Federal Council.
The company said the business was being scrutinised in detail and that transfer contracts would subsequently negotiated. At that stage, Swisscom expected the Liechtenstein parliament to decide on necessary legal adjustments for the takeover before the end of 2012.
