Australian telco TPG Telecom has announced it will acquire the Perth-based telco iiNet for a massive $1.4 billion.
The transaction, reports Fairfax, would create Australia’s second-biggest internet provider, second only to Telstra. It would would provide the combined company with 1.7 million fixed-line internet subscribers, compared to Telstra’s 3 million broadband subscribers.
TPG already owns 6.25 per cent of iiNet and this transaction will see it acquire 100 per cent of the company. The $1.4 billion price would mean that iiNet’s shares will be purchased by TPG for $8.60 each, almost $2 above their per share closing price yesterday.
The Australian Competition and Consumer Commission has already said it will undertake a public review of the takeover once both company submit proposals.
“The ACCC reviews mergers and acquisitions which have the potential to raise concerns under the Competition and Consumer Act 2010,” it said in a statement. “The CCA prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in a market.”
TPG said it will keep both the TPG and iiNet brands as they are. “Definitely we want to keep the brand, we respect and value the iiNet brand,” TPG’s consumer general manager Craig Levy said.
Reports the ABC, iiNet brings 950,000 customers to the table as at July 2014, while TPG had 748,000 at the same date, as well as an additional 362,000 mobile customers. iiNet made news recently by announcing a deal for quota-free data access to the soon-to-be-launched Netflix Australia.
The deal will now be put before iiNet shareholders and, subject to approval by the competition watchdog, the takeover is set to be completed in July.
