The Australia Competition and Consumer Commission (ACCC) has confirmed today (March 20) that it will not block Vocus Group Limited's proposed acquisition of TPG Telecom Limited’s fiber infrastructure assets and Enterprise, Government, and Wholesale (EGW) fixed business.
It paves the way for Vocus to seal the AU$5.25 billion (US$3.3bn) deal, first announced last year.
The ACCC said that the deal won't impact market competition, given Vocus will still have a number of competitors including Telstra, Optus, Aussie Broadband, and Superloop, and more.
The Australian competition watchdog kicked off its review into the deal in November.
“Our investigation found that Vocus concentrates on supplying large enterprise and government customers, whereas TPG focuses on the small and medium enterprise segment of the market,” ACCC commissioner Dr Philip Williams said.
Vocus provides fiber and network services to government, enterprise, and wholesale customers.
On top of this, the carrier also supplies communications and technology services to small and medium-sized businesses, and retail telecommunications services to consumers.
The company owns its own fiber network, which includes domestic inter-capital transmission and metropolitan fiber infrastructure serving business premises.
Vocus and TPG Telecom entered discussions with Macquarie-backed Vocus over a deal to buy TPG's non-mobile fiber assets after Vocus' initial bid of AU$6.3 billion ($4.1bn) in August 2023.
Once completed, Vocus will operate a network of more than 50,000km of fiber owned or leased under long-term right-of-use agreements, plus nearly 15,000km of international submarine cables, and around 20,000 connected buildings.
As part of the deal, Vocus will also acquire TPG Telecom’s PPC-1 submarine cable which runs from Sydney to Guam.
According to the ACCC, the introduction of NBN Co’s wholesale Enterprise Ethernet product in 2018 has "significantly reduced barriers to entry and expansion to supplying large customers."
“After the acquisition, Vocus will continue to face strong competitors including Telstra, Optus, Aussie Broadband, Superloop, and managed service providers in supplying government, large enterprise, and SME customers,” Dr Williams added.
TPG noted in a stock exchange filing that the deal will support the company's aims to streamline its business structure.
"This transaction forms an important part of our strategy to simplify our business and accelerate and increase the streamlining of our operating structure and cost base," said TPG Telecom chief executive Iñaki Berroeta.
