SYDNEY (BLOOMBERG) – Australia's federal court approved a planned A$10.9 billion (S$10.2 billion) merger of Vodafone Group's local business and phone company TPG Telecom, overturning opposition by the competition watchdog.
The Australian Competition and Consumer Commission had argued that as a standalone business, TPG might well invest in a new cellular network and the company was Australia's last chance to challenge incumbent giants Telstra Corp and Optus, owned by Singapore Telecommunications.
In a ruling in Melbourne on Thursday (Feb 13), Justice John Middleton rejected that argument, saying the "proposed merger would not have the effect, nor be likely to have the effect, of substantially lessening competition."
Vodafone Hutchison Australia – a venture between Vodafone's Australian mobile-phone division and CK Hutchison Holdings – said the merger should now be completed by the middle of this year, subject to any appeal. The ACCC said in a statement it was "carefully considering" the judgment.
Shares in TPG surged as much as 20 per cent in Sydney following the ruling before trading up 13 per cent at 12:10 p.m. local time. Hutchison Telecommunications (Australia) Ltd., home to CK Hutchison's stake in the venture with Vodafone, jumped as much as 32 per cent before trading up 21 per cent.
The ruling gives Vodafone a fresh chance to salvage something from an unprofitable Australian business that some analysts had written off as essentially worthless.
The proposed deal to create a technology giant selling mobile-phone and broadband services was blocked by the regulator in May.
TPG had indeed been investing in a new cellular network. But it ditched the plans early last year, a few months after the proposed deal with Vodafone was announced. TPG cited Australia's ban on Huawei Technologies from providing latest-geRead More – Source