Talks are said to be at an exploratory stage but markets have responded positively to the speculation, with TPG’s share price jumping by more than 20 per cent overnight
Vodafone Group and CK Hutchison are in talks to combine their faltering mobile phone businesses in Australia with local broadband provider TPG Telecom, to create a new telecoms service provider.
TPG Telecom is valued at around $4.3 billion and formerly ran its own mobile network in New South Wales. At this stage, talks are believed to be at an "exploratory stage" but TPG has described the potential move as a "merger of equals".
Shares in TPG Telecom surged on news of the prospective merger, as markets reacted positively to the news. The firm’s shares were trading at A$7.65 per share, as at 4:10pm (Australian Eastern Standard Time) on Wednesday, a whopping 21.6 per cent jump from A$6.29 at close of play on Tuesday.
Vodafone Hutchinson Australia (a 50:50 joint venture between Vodafone Group and CK Hutchison) has close to 6 million mobile subscribers and employs around 2,500 people across Australia.
TPG owns a swathe of telecoms based infrastructure across Australia and the Asia Pacific region. It recently launched Singapore’s fourth mobile network and has been instrumental in subsea connectivity between Australia and Southeast Asia. Domestically, TPG provides full fibre network connectivity in Sydney, Brisbane and Melbourne.
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