Australia court approves $10 billion Vodafone-TPG merger, overrules regulator
By Ritu,
An Australian court approved a A$15 billion merger between a unit of Britain’s Vodafone Group and internet provider TPG Telecom on Thursday, overruling a regulator and enabling a huge rival to the country’s top telcos.
A Federal Court judge said a tie-up between Vodafone’s joint venture with local telco Hutchison Telecommunications Ltd and TPG would not harm competition, rejecting the Australian Competition and Consumer Commission’s reason for blocking the deal last year.
The ruling revives a plan to challenge the dominance of Telstra Corp Ltd and Singapore Telecommunications’s Optus in the Australian market by giving TPG, an internet company, and Vodafone, a mobile phone company, access to each other’s sizeable nationwide networks.
The regulator has a month to lodge an appeal.
TPG had been looking for a way into the highly-anticipated 5G mobile market – where Vodafone is gearing up to compete – after halting construction of its own network due to an Australian ban on parts supplied by China’s Huawei Industries.
“This merger…gives a lot more certainty that there will be a strong 5G player in the market. We have confirmation we’ll have three 5G players,” Vodafone Hutchison Australia CEO Iñaki Berroeta said on a call with analysts.
TPG founder and Executive Chairman David Teoh said in a statement the company was “very pleased with the Federal Court decision” although it still needed shareholder and other regulatory approvals.
Shares of Hutchison surged as much as a quarter, while TPG shares gained 11%. Shares of Telstra, which dominates the Australian mobile and internet markets, had risen earlier on Thursday after it released its half-year earnings but fell up to 2.4% after the court ruling. SingTel’s Singapore-listed shares were down 1.2%.
The ruling was “consistent with our expectations and we’d already factored in a successful merger”, Credit Suisse analysts said in a note.
