The TPG Telecom Ltd (ASX: TPM) share price has dived 14% this afternoon after the ACCC’s decision was prematurely announced.
TPG Telecom is one of Australia’s largest broadband and mobile phone providers, with around 2 million broadband subscribers. In 2018, TPG planned to merge with the owner of Vodafone Australia, Hutchison Telecommunications (ASX: HTA), in a potential $15 billion deal.
TPG Deal Denied
The Australian Competition and Consumer Commission (ACCC) has decided to oppose the proposed merger between TPG and Vodafone Hutchison Australia Pty Ltd (ASX: HTA).
The ACCC accidentally published this news on its mergers register briefly this afternoon.
With TPG already ‘wasting’ more than $100 million on 5G technology with Huawei, the telco may have to go back to the drawing board to decide to how to approach the future.
But the merger may not be entirely stopped. Both Hutchison and TPG want to challenge the decision by taking legal action. The two telcos will seek declaratory relief from the Federal Court which has the jurisdiction to decide if the merger should be permitted on the basis it will not substantially lessen competition.
The two telcos have also agreed to extend the terms of the merger to 31 August 2020 to allow sufficient time for the Federal Court process to conclude.
VHA CEO Inaki Berroeta said: “VHA respects the ACCC process, but we believe the merger with TPG will bring very real benefits to consumers…While we continue to pursue the merger through the court, it remains business as usual for VHA. We will continue to challenge the market by delivering the best value products and services we can to our customers.”
With so much competition and uncertainty surrounding TPG and the NBN, I think there could be better investments on the ASX right now, such as the 2 rapid ASX growth shares in the free report below.
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