Australian carriers Vodafone Hutchison Australia Pty Ltd., or VHA, and TPG Telecom Ltd. have agreed to merge, Vodafone Group PLC announced Aug. 30.
As part of the deal, Vodafone Group and Hutchison Telecommunications (Australia) Ltd., or HTAL, will each own a 25.05% economic interest while the remaining 49.9% will stay with TPG.
The merged entity, to be called TPG Telecom Ltd., will have an enterprise value of around A$15 billion, combined revenues worth A$6 billion, and will be listed on the Australian Securities Exchange, according to a company statement.
"The combined listed company will be a more capable challenger to Telstra Corp. Ltd. and Singtel Optus Pty. Ltd., and will be much better placed to invest in next generation mobile and fixed line services to benefit Australian consumers and businesses," Nick Read, CEO-designate of Vodafone Group said.
TPG and Vodafone Hutchison Australia had earlier confirmed they are engaged in "exploratory discussions" about a possible merger. CK Hutchison owns 50% of Vodafone Hutchison Australia via Hutchison Telecommunications.
The new board will have David Teoh, the current CEO and chairman of TPG, as chairman. Iñaki Berroeta, the CEO of Vodafone Hutchison Australia, will be the managing director and CEO.
The merger is subject to approval from shareholders of TPG and regulators and is expected to be completed in 2019.
Vodafone Hutchison Australia's net debt of around A$4.8 billion will be held through another entity owned by Vodafone Group and HTAL and will not be accounted for by the new merged company.
A standalone joint venture agreement has also been sealed parallel to the merger, to acquire, hold and license 3.6 GHz spectrum which the Australian government will auction in November.