$15 Billion TPG-Vodafone Merger Ruling Due, ACCC Sweat
The proposed $15 billion TPG-Vodafone merger could be in the clear to go ahead when the Federal Court makes a decision on the landmark appeal ruling next Thursday.
The companies took the case to the Federal Court after the Australian Competition and Consumer Commission (ACCC) rejected the deal last year on the grounds it would hinder competition in the $20 billion telecommunications market.
The ACCC also ruled the proposed merger would likely prevent TPG entering as a fourth player in the mobile networks market – therefore, reducing competition in the sector and reducing options for consumers.
The merger would amalgamate the third and fourth players in Australia’s most important telecommunications market, producing over $20 billion in revenue.
But TPG says it was never a player in the mobile market and the government’s ban on using Huawei’s 5G network put a stop to its rollout plans.
Both companies argue the combination of TPG’s fixed line broadband business and Vodafone’s mobile sales business would become a potent competitor to the government-subsided Telstra.
The ACCC argues, instead, that there is a real change TPG could re-enter the mobile market.
It also made note that TPG spend $1.3 billion on mobile spectrum, which underlies its potential intent to re-enter the sector.
The ACCC has not won a big merger court case in over 10-years and most lawyers are reportedly expecting the body to also lose this one.
Analyst firm Venture Insights, however, is among the observers that expects the Federal Court to rule in its favour.