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$10B Vodafone-TPG Merger Approved In Australia

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$10B Vodafone-TPG Merger Approved In Australia

TPG Telecom Ltd. and Vodafone Hutchison Australia Ltd. merger have gotten the go-ahead from a court in Australia.

What Happened

The merger between TPG Telecom and Vodafone Group Plc’s (NASDAQ: VOD) local unit was approved on Thursday. The ruling overturns the merger’s block by the Australian Competition and Consumer Commission (ACCC) in May 2019.

ACCC didn't approve the merger because of the fears that lessening competition in the market would further concentrate already “tight Australian telecommunications sphere.”

Vodafone Hutchison CEO Iñaki Berroeta stated that this was “a great outcome for the Australian economy,” as it would allow for greater investment in the next generation networks, including 5G. He added that the merger should be completed by mid-2020, subject to remaining regulatory and shareholder approvals.

Why It Matters

According to Reuters, ACCC’s blocks of some of the biggest mergers and acquisitions deals in recent years have been overturned by courts. 

ACCC has taken the stance that Australian consumers have lost “a once-in-a-generation” opportunity for “stronger competition and cheaper mobile telecommunications services” as the merger can now go ahead. The Australian regulator said it was considering the judgment.

TPG had stopped the construction of its mobile network as of January 19, hoping that ACCC would approve the proposed merger. 

Price Action

Vodafone shares traded 0.10% higher at $19.77 in the after-hours session on Wednesday. The shares had closed the regular session 1.81% higher at $19.73.

Photo Credit: Public domain image via Wikimedia.

Posted-In: Australia ReutersM&A News Markets Tech Media General Best of Benzinga

 

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