New Zealand regulator the Commerce Commission has granted clearance to a transaction that would see the merger of the Vocus Group with 2degrees. The NZD1.7 billion (USD1.15 billion) deal announced last December will form the country’s third-largest integrated telecoms provider, serving more than 1.5 million mobile and 345,000 fixed line subscriptions.
The proposed transaction involves a newly incorporated Vocus Group company, Voyage Digital (NZ) Limited, acquiring all of the shares of Orcon Holdings (formerly known as Vocus New Zealand Holdings) and then acquiring all of the shares in Two Degrees Group from its shareholders, Trilogy International New Zealand and Tesbrit. The parties expect closing will take place in the first half of this year.
In reaching its decision, the Commission considered the potential impact of the proposed merger on competition in retail and wholesale telecommunications markets. Deputy Chair Sue Begg said the Commission was satisfied that the merger is unlikely to substantially lessen wholesale and retail competition in broadband, fixed voice and mobile services. ‘The evidence before us indicates that the merged entity will continue to face strong competition from existing competitors, including Spark and Vodafone’, said Ms Begg, adding: ‘While the transaction will result in the vertical integration of 2degrees’ mobile network with the largest mobile virtual network operator (MVNO), Vocus, we do not consider the transaction will significantly change the incentives of network operators to grant access to MVNOs.’
The combined Australian-owned business, which will be called 2degrees and headed by Vocus NZ chief executive Mark Callander, will have a total of around 1,800 staff and annual revenues of NZD1.2 billion.