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COMBINING INFRASTRUCTURE TO TACKLE TELSTRA AND OPTUS DOMINANCE.
THE WHISPERS OF a merger between Vodafone Hutchison Australia (VHA) and TPG have now been confirmed, with the two telcos recently announcing they’ve entered into a “merger of equals transaction to establish Australia’s leading challenger full-service telecommunications provider”. According to a statement release by TPG, “The merger will create a more effective challenger to Telstra and Optus, with an integrated fixed and mobile offering and a pro forma enterprise value of approximately $15 billion.”
The ‘merger of equals transaction’ is how the shares have been divvied up – Vodafone shareholders will own 50.1% of the shares in the new company, and the other 49.9% will be held by TPG shareholders. Vodafone and TPG coming together joins more than 27,000km of fibre and 500 mobile sites across the country, with more than 6 million mobile users and 1.9 million fixed-line customers. While the merger has been given informal approval and has been announced at the ASX, the companies will also need to be formally approved by both the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board.