Vodafone–Hutchison merger gets ACCC nod

02 June 2009

The Australian Consumer and Competition Commission (ACCC) has finally approved the proposed amalgamation of Vodafone Australia Ltd. and Hutchison 3G Australia Pty Ltd. (branded as '3') into Vodafone Hutchison Australia (VHA), on the grounds that the merger would not reduce the competition in the retail telecommunications market.

The 50:50 merger deal between the two major mobile operators in the country was announced earlier in February.

''A key consideration in the ACCC's investigation was whether increased concentration in the mobile sector would result in reducing pricing pressure for retail mobile telecommunications services. It considered evidence that, individually, without this merger, the parties would not sustain vigorous price competition in the longer term,'' said the ACCC in a statement.

Welcoming the competition regulator's decision, the Vodafone CEO (Asia Pacific & Middle East) and the would-be chairman of VHA Nick Read, said, ''The ACCC's decision confirms our view that this merger will be good news for Australian customers. VHA will be a stronger mobile company, more competitive and more capable of providing an even better deal for customers.''

Vodafone and '3' plan to complete the joint venture transactions by next week. The new company VHA will be traded as Vodafone in the stock exchanges.

As per the deal, VHA has to pay A$500 million to Vodafone within 18 months to even up the differences in the valuations of Vodafone and '3'.