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TPG Telecom to Sell Fiber Network Assets to Vocus Group for AU$5.25 Billion

Telecom

Enterprise Broadband: Competition & Capital Management

Business Honor
16 October, 2024

TPG Telecom sells fiber network and EGW infrastructure to Vocus Group for AU$5.25 billion.

TPG Telecom would sell its fiber network assets and the Enterprise, Government, and Wholesale (EGW) fixed infrastructure business to Vocus Group for an amount of AU$5.25 billion or US$3.54 billion. This binding share purchase agreement comprises TPG's Vision residential wholesale broadband business. TPG intends to use the net proceeds of this transaction for future capital management and business investments.

The head of TPG, Iñaki Berroeta, highlighted, "when starting to focus on the sale, it will positively affect its financial situation and operating efficiency and opens up considerable opportunities for TPG to restructure its capital structure". Furthermore, the deal will increase competition in the enterprise connectivity space in Australia because of the extension of Vocus' capabilities for the EGW customers of TPG.

In September last year, Vocus had attempted to acquire all the fiber assets of TPG for AU$6.3 billion, however, the deal could not go through due to price variations. Under the new deal, Vocus will be providing fixed network services to TPG for 15 years at AU$130 million a year.

The acquisition will mean that Vocus will own and operate more than 50,000 km of fiber as well as nearly 15,000 km of international submarine cables. This includes submarine PPC-1 owned by TPG which would bolster connectivity for Vocus. The deal is expected to be completed by Q2 of 2025 after receipt of all the regulatory approvals required.