Saturday, 25 May 2019 05:56

Vodafone, TPG begin court action to get merger approval Featured

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Vodafone, TPG begin court action to get merger approval Image by mohamed Hassan from Pixabay

Vodafone Hutchison Australia and TPG Telecom have taken action in the Federal Court, seeking orders that the proposed merger between the two companies will not have the effect, or likely effect, of substantially lessening competition.

In a statement posted to the ASX after it closed on Friday, VHA said it had filed a statement of claim to seek approval for the proposed merger.

The Australian Competition and Consumer Commission announced on 8 May, a day ahead of the scheduled date for its final decision, that it would be opposing the proposed merger between the two companies.

Both firms said the same day that they intended to challenge the decision in court.

A VHA spokesperson said in a statement on Friday: "We believe the merger will create an entity that can compete more aggressively in the mobile market and will increase our ability to invest in networks, new technologies, and competitive plans and products for Australian consumers."

TPG's statement to the ASX said: "For legal process reasons, the Statement of Claim identifies VHA as the applicant and the Australian Competition and Consumer Commission and TPG as the respondents.

"TPG and VHA are working together to progress the proceedings and TPG supports the orders being sought in the VHA application. The parties will seek orders for expedition of the proceedings."

As to the reasons for its decision, the competition watchdog said it had considered that the proposed merger would reduce competition and contestability in the fixed broadband sector.

It said, in particular, a deal was likely to "substantially lessen competition in the supply of mobile services because the proposed merger would preclude TPG entering as the fourth mobile network operator in Australia".

TPG announced in January that it was cancelling plans for a mobile network due to the Australian Government ban on the use of equipment from Chinese vendor Huawei Technologies.

The proposed merger was announced on 30 August last year, with the scrip deal creating a company with an enterprise value of about $15 billion.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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