TPG And Vodafone Just Announced A Huge Merger

TPG And Vodafone Just Announced A Huge Merger

The merged group will be owned 49.9 per cent by TPG shareholders and 50.1 per cent by VHA shareholders: Vodafone and Hutchison Telecommunications Australia.

TPG chairman and chief executive David Teoh will be chairman of the merged group, while Vodafone boss Iñaki Berroeta will be chief executive and managing director.

Last week the pair acknowledged that they had been engaged in "exploratory discussions" about a potential merger.

The merger between TPG and Vodafone would, thus, make life easier for both Telstra and Optus.

"Together TPG and Vodafone will have a comprehensive portfolio of fixed and mobile products, and will own the infrastructure required to deliver faster services and more competitive value propositions to Australian customers".

Australian telecommunications entrepreneur Bevan Slattery has previously predicted that TPG will become the second-largest carrier in Australia within five years, while analyst firm Telsyte has said TPG could sign up two in five Australians to its mobile network.

Through a series of acquisitions, TPG has a 11,000km-long fibre network providing wholesale broadband services to businesses.

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"The combination of the two companies will create an organisation with the necessary scale, breadth and financial strength for the future", he added.

Following the merger, Vodafone Australia should have a net debt of around AU$1.944 billion plus a spectrum payment of AU$80 million on January 31, while TPG will have a net debt of around AU$1.672 billion plus a spectrum payment of AU$352 million on January 31, with Berroeta calling the merged entity "a more sustainable company".

Australian business is the third largest mobile operator in the country after Telstra (TLSYY) and Optus, which also have big fixed-line internet operations.

The merger is expected to be completed next year subject to approval from regulators, including the Foreign Investment Review Board and the Australian Competition and Consumer Commission.

With the Australian government offering 125 MHz of 3.6 Ghz-band mobile spectrum ahead of the deal's completion, TPG and Voda have created a joint venture to take part in the auction, due to begin in November 2018. Vodafone announced Thursday that it's teaming up with TPG, a major fixed-line broadband provider.

TPG will also separate its Singapore mobile business to existing shareholders by way of a non-cash distribution, in a deal which will not affect TPG's merger ownership.

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