T-Mobile’s €1.9 billion acquisition of UPC Austria from Liberty Global plc

Mobile network operator T-Mobile Austria, a subsidiary of German telco Deutsche Telekom, acquired UPC Austria from Liberty Global plc, the largest international cable network operator, for around €1.9 billion.

Through the acquisition T-Mobile Austria will gain a strong foothold in the fixed-line market, enabling it to offer quadruple play products to its customers: TV, internet, fixed-line telephony and mobile services. The move will also put Austria’s second-largest mobile network operator in a position to intensify competition with market leader A1 Telekom Austria.

The sale price of €1.9 billion represents a multiple of nearly 11x UPC Austria’s estimated 2017 adjusted segment operating cash flow, as customarily defined by Liberty Global, or approximately 34x UPC Austria’s estimated 2017 operating free cash flow.

The cash value of the synergies amounts to €0.8 billion after integration costs, according to Deutsche Telekom, representing a meaningful value creation opportunity. Cost and capex efficiencies are expected to deliver 80% of the synergies, for example in areas like IT and network operations.

Liberty Global has agreed to provide certain transitional services for a period of up to four years. These services principally comprise network and information technology-related functions. The annual charges will depend on the actual level of services required by T-Mobile Austria. Liberty Global will also allow T-Mobile Austria to use the UPC brand for a transitional period of up to three years.

The transaction, which is still subject to approval by the relevant competition authorities, is expected by the companies involved to close in the second half of 2018.

Wolf Theiss advised T-Mobile in all legal aspects of its acquisition with a Corporate/M&A team led by Partner Horst Ebhardt (picture) and Partner Hartwig Kienast (transaction coordination), alongside Partner Richard Clegg, Partner Christian Mikosch, Senior Associate Jiayan Zhu, Associate Daniel Kocab, Associate Lukas Pinegger and Associate David Gschaider. On Reorganization / Outsourcing matters provided assistance Partner Hartwig Kienast; on IP/IT matters advised Partner Georg Kresbach, Partner Roland Marko, Senior Associate Anja Greiner and Associate Bernhard Schmidt; On Public Law & Telecom Regulation aspects advised Partner Kurt Retter and Associate Johanna Kroeswagn; On Employment law acted Partner Ralf Peschek, Associate Julia Morscher; on Competition law provided assistance Partner Günter Bauer and Senior Associate Robert Wagner; on Tax matters advised Partner Niklas Schmidt; and on Real Estate aspects advised Partner Karl Binder and Associate Jakob Jelinek.

Nauta Dutilh covered Dutch law for T-Mobile.

The Freshfields team advising Liberty Global was led by London-based Partner David Sonter, working alongside Vienna-based Principal Associate Ludwig Hartenau and Associate Martin Schwertmann, among others.

 

Involved fees earner: Horst Ebhardt – Wolf Theiss; Hartwig Kienast – Wolf Theiss; Richard Clegg – Wolf Theiss; Christian Mikosch – Wolf Theiss; Jiayan Zhu – Wolf Theiss; Daniel Kocab – Wolf Theiss; Lukas Pinegger – Wolf Theiss; David Gschaider – Wolf Theiss; Georg Kresbach – Wolf Theiss; Roland Marko – Wolf Theiss; Anja Greiner – Wolf Theiss; Bernhard Schmidt – Wolf Theiss; Kurt Retter – Wolf Theiss; Johanna Kroeswagn – Wolf Theiss; Ralf Peschek – Wolf Theiss; Julia Morscher – Wolf Theiss; Günter Bauer – Wolf Theiss; Robert Wagner – Wolf Theiss; Niklas Schmidt – Wolf Theiss; Karl Binder – Wolf Theiss; Jakob Jelinek – Wolf Theiss; David Sonter – Freshfields Bruckhaus Deringer LLP; Ludwig Hartenau – Freshfields Bruckhaus Deringer LLP; Martin Schwertmann – Freshfields Bruckhaus Deringer LLP;

Law Firms: Wolf Theiss; Freshfields Bruckhaus Deringer LLP;

Clients: Liberty Global; T-Mobile Austria;