FIRB backs telco merger
The Foreign Investment Review Board (FIRB) has approved the $15 billion merger between TPG Telecom and Vodafone.
The green light from FIRB clears the way for TPG shareholders to vote on the merger.
“The merger is now another significant step closer to reality, and we're progressing our plans to bring the two companies together mid-year,” said Inaki Berroeta, chief executive of Vodafone Hutchison Australia.
Details of the merger should be available in coming weeks, allowing TPG shareholders to vote on the plan, which will then be submitted for final court approval.
Mr Berroeta would become chief executive of the combined companies, while TPG founder David Teoh will be chairman.
The deal moved ahead after the Federal Court overruled the concerns of the Australian Competition and Consumer Commission (ACCC).
The consumer watchdog opposed the merger in mid-2019 because it believed it could substantially lessen competition in the mobile market by blocking TPG from becoming a fourth competitor in that space.
But TPG argued it had abandoned plans to roll out its own network.
Justice John Middleton rule din the telcos’ favour, finding no credible hopes of TPG becoming Australia's fourth mobile network provider.
“It is the rational and businesslike solution for TPG and Vodafone to merge and be a stronger competitive force against Optus and Telstra,” he said.
“It is not for the ACCC or this court to engineer a competitive outcome.”
The ACCC had no grounds to appeal against the court's ruling.
“The ACCC remains disappointed by this outcome, which has closed the door on what we consider was a once-in-a-generation chance for increased competition in the highly concentrated mobile telecommunications market,” ACCC chairman Rod Sims said.
“The future state of competition without a merger is uncertain. But we know that competition is lost when incumbents acquire innovative new competitors.”