Vodafone merger to create £8.4bn Australian telecoms business

Vodafone Group Plc has revealed plans to merge its Australian business with a telecoms company based in Sydney.

The deal between Vodafone Hutchison Australia Pty Limited and TPG Telecom Limited will create a £8.4bn company, trading as MergeCo, with revenues of more than £3.4bn and an EBITDA of over £1bn.

Vodafone said the merger will put it in a better position to compete Down Under with rivals Telstra and Optus.

VHA is currently the fourth-largest telecoms firm in the country and TPG the third.

Vodafone and Hutchison Telecommunications (Australia) Limited will each hold a 25% stake in MergeCo. The remaining 49.9% will be held by TPG shareholders.

Nick Read, CEO-designate of Vodafone, said of the merger: “This transaction accelerates Vodafone’s converged communications strategy in Australia and is consistent with our proactive approach to enhance the value of our portfolio of businesses.

“The combined listed company will be a more capable challenger to Telstra and Optus, and will be much better placed to invest in next generation mobile and fixed line services to benefit Australian consumers and businesses.”

The combined business will be led by managing director and CEO Iñaki Berroeta, currently chief exec of VHA. TPG’s CEO and chairman, David Teoh, will be chairman of MergeCo.

If approved by TPG shareholders and the regulatory authorities, the merger will complete in 2019.

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