Vocus and M2 have agreed to merge, creating a combined local telco with $1.8 billion in revenue.
The market capitalisation will be more than $3 billion, putting it within the S&P/ASX 100 club of companies.
James Spenceley, the founder of Vocus, will hand over the CEO role to Geoff Horth, the current CEO of M2. Spenceley will sit on the combined board as an executive director.
The all share transaction, where M2 shareholders will get 1.625 Vocus shares for each M2 share, will give M2 shareholders about 56% of the combined company.
The deal, which will be subject to approval by the consumer watchdog, the ACCC, is the latest in a run of mergers and takeovers among second level telcos in Australia. Vocus in June closed a merger with Amcom and TPG recently acquired iiNet in a $1.56 billion deal.
M2 as outbid by TPG in the iiNet takeover. And TPG tied unsuccessfully to block the Vocus and Amcom merger.
Vaughan Bowen, founder of M2, will continue on the combined board as executive director, retaining his focus on strategic acquisition opportunities.
David Spence, chairman of Vocus, says the merger is a compelling opportunity for all shareholders.
“The businesses combine Vocus’ telecommunications infrastructure and corporate customer base with M2’s demonstrated expertise in the consumer and SME segments,” he says.
“The merger creates the fourth largest vertically integrated telecommunications company in Australia and the third largest in New Zealand.”
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