Antitrust watchdog blocks $11bn merger of Vodafone’s Australian business with TPG Telecom

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Competition commission says deal would reduce rivalry in cellphone and fibre markets

Different types of 4G, 5G and data radio relay antennas for mobile phone networks are pictured on a relay mast operated by Vodafone in Berlin, Germany, in this April 8 2019 file photo. Picture: REUTERS/FABRIZIO BENSCH

Vodafone mainly runs a mobile-phone business in a joint venture with Hutchison Telecommunications but has struggled with reliability, while TPG largely has an internet business with a low-cost reputation. It is the largest deal the regulator has blocked for years and could now grind through the courts, much like the ultimately successful tie-up between gambling houses Tabcorp Holdings and Tatts Group in 2017.

TPG shares dropped as much as 15% and closed at a five-month low, more or less where they were before the deal was agreed, while thinly traded Hutchison stock dropped 28% to its lowest since February.“There are a number of unknowns and many variable valuation outcomes,” Nick Harris, an analyst at Brisbane stockbroker Morgans wrote in a note to clients after ACCC’s decision.

“TPG has the capability and commercial incentive to resolve the technical and commercial challenges it is facing.” The regulator’s decision caught traders, analysts and the companies unawares since it was not due to be announced until Thursday after the decision date had been delayed twice.

 

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