Vodafone and TPG announce merge, forming new AU$15 billion company
A "merger of equals" is set to shake up the Aussie telco market.
Australia's telco market will be getting smaller after TPG and Vodafone announced a AU$15 billion merger Thursday morning.
TPG is currently Australia's third largest telco provider, while Vodafone Hutchinson Australia sits in fourth place.
On Aug. 22, the two companies announced they were in "exploratory discussions" to merge, but neither company offered any comment on what a proposed merger would look like.
The company will continue to be listed as TPG Telecom Ltd on the Australian stock exchange, but Vodafone will own 50.1 percent of the new entity, with TPG taking the remaining 49.9 percent. Iñaki Berroeta, CEO of Vodafone, will take up the CEO position of the merged entity, while David Teoh, current TPG owner, will be the chairman.
"The way I believe people will look at it is the benefit it will bring to the customer," Berroeta told Fairfax Media.
Ben McIntosh, Vodafone's chief commercial officer, said in a statement sent to CNET that the merger "will create even more opportunities for us as a combined entity to drive value for Australian customers."
The merger will have to work through regulatory approvals from both the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB) before it is completed, which is not expected until next year.
Berroeta also told Fairfax Media that he is confident the merger will be approved.
Both companies have begun diversifying their offerings in the past 12 months. TPG sits behind Telstra as the biggest broadband provider in the country, but has been looking to shore up its mobile services in Australia in recent months. On the other hand, Vodafone jumped into the NBN game late last year -- so both companies look set to benefit from a symbiotic relationship.
For customers of the two companies, there's still a lot of water to go under the telco tower, but as of right now it appears little will change.
"We're very excited about the future, but for the moment, nothing changes for our customers," said McIntosh. "They can continue to enjoy all the things they love about us."
CNET reached out to TPG for comment but did not immediately receive a response.