Vodafone Australia and Hutchison’s 3 Australia have announced the intention to merge operations to form a single mobile-only company. The new company would be named VHA and be a 50/50 joint venture between Hutchison and Vodafone (NYSE: VOD) — however the new company will sell plans under the Vodafone brand. The chairman of the new company will be Nick Read (CEO of Vodafone Asia-Pacific & Middle East Region), the CEO will be Nigel Dews (currently CEO of 3) and the CFO will be Dave Boorman (currently CFO of Vodafone Australia). Current Vodafone Australia CEO Russell Hewitt will be a non-executive Director of VHA. The deal will also include a AU$500 million (US$334 million) payment to Vodafone, which will be structured as a loan by Vodafone to the new company. VHA will also pay a licensing fee for the Vodafone brand of 1 percent of service revenues.
Vodafone is Australia’s third largest mobile provider and 3 is the fourth largest…VHA will have 6 million customers and combined total revenues of approximately AU$4 billion (US$2.67 billion) for the twelve months ended 30 June 2008. Three also has an agreement with Telstra to share a 2100 MHz network, and ZDNet Australia notes that from their point of view this will continue. The deal is expected to close in mid-2009 subject to approval from the Foreign Investment Review Board, clearance from the Australian Competition and Consumer Commission and approval of Hutchison Australia’s shareholders.
(Release PDF)
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