Vodafone Hutchison Australia (VHA) and fixed-line operator TPG Telecom announced today (30 August) they agreed to merge, in a deal valued at an estimated AUD15 billion ($11 billion) which is expected to close by year-end.
VHA will take a 50.1 per cent stake, while TPG will have a 49.9 per cent interest, with the new entity to be relisted on the Australian Securities Exchange as TPG Telecom.
In a stock market filing, TPG chairman David Teoh said: “The merger with VHA represents an exciting step-change in TPG’s evolution. With this merger, we will be a more formidable competitor against Telstra and Optus.”
VHA held an 18 per cent share of Australia’s connections (excluding cellular IoT) at end-June, trailing market leader Telstra (50 per cent) and Singtel-owned Optus (31.5 per cent), data from GSMA Intelligence showed.
Inaki Berroeta, VHA CEO, said in the filing that TPG and VHA will provide stronger competition in the market and greater choice for Australian consumers and enterprises across fixed broadband and mobile.
Last week the two companies confirmed they were exploring a “merger of equals”. Hutchison Telecommunications (Australia) holds a 50 per cent stake in VHA.
TPG Telecom is building a mobile network across Australia after acquiring spectrum in December 2017 and is expected to launch low-cost services soon. It will enter the market as the fourth major player, along with a few MVNOs. In May it said initial coverage will include central business districts and surrounding suburbs in Sydney, Melbourne, Adelaide, Canberra and Brisbane.
The merger requires the approval of the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
Before the merger is completed, TPG said it plans to separate its Singapore mobile business from its existing business. In December 2016, TPG Telecom also won a fourth mobile licence in Singapore in a spectrum auction open only to new entrants.Subscribe to our daily newsletter Back