Tpg Telecom (ASX:TPM)
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3 Months : From Apr 2019 to Jul 2019
By Robb M. Stewart
MELBOURNE, Austaralia--Shares in telecommunications company TPG Telecom Ltd. (TPM.AU) fell sharply on Wednesday after Australia's competition regulator said it planned to oppose its planned tie-up with rival Vodafone Hutchison Australia.
In a brief statement to the stock exchange, the Australian Competition and Consumer Commission said a decision to block the deal was inadvertently published online on its mergers register. It intends to release further details shortly.
TPG's shares dropped 14% with the news to A$6.01.
The companies unveiled plans for a merger in late August, aiming to create a company with an enterprise value of about 15 billion Australian dollars (US$10.5 billion) and bringing together TPG's more than 1.9 million fixed-line residential subscribers and Vodafone Hutchison's roughly 6 million mobile-service subscribers.
Analysts considered the deal had a greater chance of regulatory approval after TPG in January abandoned the rollout of its own mobile telecoms network in Australia after Canberra blocked use of equipment made by China's Huawei Technologies Co. on national security grounds.
Australia's telecommunications operators have struggled in recent years with intense competition as the federal government pushes ahead with a nationwide broadband network, which sells capacity to operators.
Billed as a merger of equals, the new company was to have been 50.1% owned by Vodafone Hutchison, a 50-50 venture between the U.K.'s Vodafone Group PLC (VOD.LN) and an Australian company controlled by Hong Kong-based CK Hutchison Holdings Ltd. (0001.HK). The remaining interest would have been held by TPG's shareholders.
TPG and Vodafone Hutchison anticipated substantial cost savings and revenue benefits from cross-selling products.
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(END) Dow Jones Newswires
May 08, 2019 02:12 ET (06:12 GMT)
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