Vodafone Australia and TPG announce $15bn merger

Claire Reilly  CNET

Claire Reilly CNET

Combined, the companies would also manage more than 5000 mobile network sites, a fibre network spanning more than 27,000 kilometres, and a range of global undersea cables and other assets in the mobile spectrum.

The new company, to be called TPG Telecom, would unite TPG - best known locally for its fixed-line broadband services, although it has also been working to build its own CBD-based 4G mobile network - with the nearly 6 million mobile customers of Vodafone Hutchison, which ranks as Australia's third-largest mobile operator.

"The combination of these assets will maximise the opportunities presented by convergence and best position to combined company to invest in 5G technologies that will deliver faster services and offer more competitive value propositions to more Australian customers", TGP said.

TPG is one of Australia's largest internet service providers.

"With this merger, we will be a more formidable competitor against Telstra and Optus", said TPG chairman David Teoh.

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TPG shareholders would own 49.9% of the merged company, which will be called TPG Telecom because of its current Australian stock market listing.

Berroeta is expected to stay on as boss of the merged group, while TPG's chief and chairman, David Teoh, is set to become chairman.

"There are no changes now planned to any of the existing brands of either TPG or VHA".

The deal was thrashed out following years of domination for Telstra in Australia's mobile communications market though times have proved tougher more recently.

TPG's Singapore operations will be spun off into a separate company, with the telco set to launch Singapore's fourth mobile network by the end of 2018.

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Major shareholders of Vodafone Australia and TPG, including Mr Teoh, have entered a 24-month voluntary escrow arrangement as a show of their commitment to the merger. "Together, TPG and Vodafone will provide stronger competition in the market and greater choice for Australian consumers and enterprises across fixed broadband and mobile", Berroeta said.

The Australia-based company had successfully bid to become Singapore's fourth telco in December 2016, and is now building out its mobile network infrastructure.

The two companies on Thursday confirmed to the ASX they plan an all-scrip, merger-of-equals, after revealing the discussions last week.

"IMDA's priority is to ensure that TPG Singapore will fully meet all its licence and regulatory obligations, and that there is no adverse impact to Singapore's competitive industry landscape or the public interest", the spokesperson said.

Separate to the merger agreement, TPG and Vodafone Australia also signed a joint venture agreement to acquire a 5G spectrum at an auction by the Federal Government later this year.

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