Vodafone Australia and TPG shares crash after regulator blocks merger in website blunder
Australia’s competition regulator has blocked a proposed AU$15bn (£8.1bn) merger between TPG Telecom and Vodafone Australia after a botched announcement that sent shares crashing.
The Australian Competition and Consumer Commission (ACCC) last year launched a probe into the planned deal, warning it may harm competition in the country’s telecoms market, and was due to publish its verdict tomorrow.
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But the regulator was forced to release its decision early after accidentally publishing the information on its website, sending shares in TPG and Vodafone Australia down 13 per cent and almost 30 per cent respectively.
The two firms have since said they plan to take legal action against the decision.
“Wherever possible, market structures should be settled by the competitive process, not by a merger which results in a market structure that would be subject to little challenge in the future,” said ACCC chair Rod Sims in a full statement released following the blunder.
“This is particularly the case in concentrated sectors, such as mobile services in Australia.”
Australia has only a few major players in the telecoms market, with three providers holding a market share of roughly 85 per cent in both the mobile and fixed broadband markets.
Vodafone Australia focuses on mobile services, while TPG provides broadband. The ACCC said a merger would prevent the firms from competing in each other’s markets.
In particular, it raised concerns that the deal would prevent TPG from becoming the country’s fourth mobile network operator.
“TPG is the best prospect Australia has for a new mobile network operator to enter the market, and this is likely the last chance we have for stronger competition in the supply of mobile services,” Sims said.
TPG began building a mobile network using Huawei equipment in 2017, but was forced to halt the rollout earlier this year after the government issued a ban on the Chinese firm.
Vodafone Australia said it remains committed to the merger and plans to launch legal action against the decision.
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“Vodafone Hutchinson Australia respects the ACCC process, but we believe the merger with TPG will bring very real benefits to consumers,” said chief executive Inaki Berroeta.
“We have therefore decided that VHA should, together with TPG, pursue approval of the merger through the federal court.”
TPG has been contacted for comment.