TPG to acquire iiNet for AU$1.4 billion
TPG has announced plans to purchase rival, and Australia's third-largest internet service provider, iiNet.
The deal was announced to the Australian Securities Exchange on Friday morning. TPG will acquire 100 percent of iiNet shares, of which the company already had a significant stake.
The total value of the deal is worth AU$1.4 billion.
The agreement will see the combined TPG company become larger than Australia's second-largest telecommunications company Optus, increasing TPG's customer base to 1.7 million.
There will be combined revenues of AU$2.3 billion.
iiNet chairman Michael Smith said that the proposal was a "significant reward" for iiNet shareholders.
TPG CEO David Teoh gave a rare public comment stating in the announcement that iiNet and TPG are "highly complementary businesses in terms of geographic presence, market segments, and corporate customer base".
"The combined businesses will provide broadband services to over 1.7 million subscribers and will be well positioned to deliver scale benefits in an NBN environment."
The deal will need the approval of the Australian Taxation Office, and will likely require approval from the Australian Competition and Consumer Commission.
A spokesperson for the ACCC confirmed that it would review the deal.
"The ACCC will commence a public review after receiving a submission from the parties. We will call for submissions at that time," the spokesperson said.
"The ACCC reviews mergers and acquisitions which have the potential to raise concerns under the Competition and Consumer Act 2010. The CCA prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in a market."
TPG said that it had received "written notice" from the ACCC that it would not intervene, oppose, or seek to prevent the takeover.
The agreement would come into effect from July, if approved, according to a TPG timeline.
The deal follows the recent departure of high-profile iiNet and Internode executives, including founder Michael Malone, Internode founder Simon Hackett, chief technology officer John Lindsay, and chief regulatory officer Steve Dalby.
More to come.