Item 1.01 Entry into a Material Definitive Agreement.
On September 22, 2021, Liberty Global plc (“Liberty Global”) and its subsidiary, UPC Poland Holding B.V., a Dutch besloten vennootschap organised and existing under the laws of the Netherlands (“Seller”), entered into a Sale and Purchase Agreement (the “Purchase Agreement”) with Iliad S.A., a société anonyme organized and existing under the laws of France (“Iliad”), and its subsidiary, P4 sp. z o.o., a limited liability company (spółka z ograniczoną odpowiedzialnością) organized under the laws of Poland (“Purchaser”). Pursuant to the Purchase Agreement, the Seller will sell to the Purchaser 100% of Liberty Global’s operations in Poland through the sale of the entire issued share capital of UPC Polska Sp. z o.o., a limited liability company (spółka z ograniczoną odpowiedzialnością) organized under the laws of Poland (“UPC Poland”), for a total enterprise value of PLN 7,025 million (approximately $1.8 billion) on a U.S. GAAP basis, subject to customary debt and working capital adjustments at the closing of the transaction (the “Closing”). The cash proceeds of the transaction, net of debt repayment at the UPC bank group, to Liberty Global is currently expected to be approximately $600 million, to be determined at Closing in accordance with the adjustments set forth in the Purchase Agreement.
The Closing is subject to the satisfaction of certain conditions, including (i) antitrust clearance by the European Commission and/or the national antitrust authority in Poland, Prezes Urzędu Konkurencji i Konsumentów (UOKiK), as applicable, or the expiration of any required waiting periods under applicable antitrust laws and (ii) obtaining foreign investment clearance from the competent Polish authority, if applicable (the “Foreign Investment Condition”).
The Purchase Agreement contains certain termination rights for both the Seller and the Purchaser, including if the Closing has not occurred within twelve (12) months following the date of the Purchase Agreement (the “Long Stop Date”), which may be extended by a period not to exceed six (6) months, by notice from either the Seller or the Purchaser to the other party in writing, provided that, in the reasonable opinion of the party giving notice, the Closing conditions will be fulfilled in accordance with the Purchase Agreement prior to the extended Long Stop Date. Additionally, if the Foreign Investment Condition applies and is the only Closing condition not fulfilled on or before the extended Long Stop Date, then in certain circumstances either the Seller or the Purchaser may give notice to the other to further extend the initially extended Long Stop Date by a period not to exceed three (3) months.
The Purchase Agreement contains customary warranties, indemnities, and covenants by the Seller and the Purchaser, and Liberty Global and Iliad have each agreed to guarantee any payment obligations of the Seller and Purchaser, respectively. The covenants relate to, among other things, the conduct of UPC Poland during the period between the execution of the Purchase Agreement and the Closing and the completion of certain pre-Closing actions with respect to UPC Poland and its business. The Purchaser agrees to use its reasonable best efforts to obtain regulatory approvals in connection with the transactions contemplated by the Purchase Agreement. The Purchase Agreement also includes restrictions on Liberty Global and its affiliates, for a period of eighteen (18) months following the Closing, with respect to its ability to (i) compete with UPC Poland in connection with fixed line telecommunications, mobile telecommunications, pay television services (including by means of satellite telecommunications services), over the top (OTT) services, and certain other services in Poland, subject to certain exceptions; and (ii) solicit or hire certain employees, in each case, subject to certain exceptions set forth in the Purchase Agreement.
Pursuant to the Purchase Agreement, UPC Poland and certain of Liberty Global’s affiliates will enter into certain ancillary agreements in connection with the transactions contemplated by the Purchase Agreement, including (i) a brand license agreement permitting UPC Poland to use certain intellectual property owned by a Liberty Global subsidiary, and (ii) transitional services agreements relating to certain transitional services to be provided following the Closing to and from Liberty Global and its subsidiaries, on the one hand, and UPC Poland, on the other hand.
Subject to satisfaction of the Closing conditions, including receipt of regulatory approvals, the Closing is expected to take place in the first half of 2022.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be a complete description and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
The Purchase Agreement contains representations and warranties by each of the parties to the Purchase Agreement, which were made only for purposes of that agreement and as of specified dates. The representations and warranties and covenants in the Purchase Agreement were made solely for the benefit of the parties to the Purchase Agreement.