TPG and Vodafone merger allowed to proceed
The Federal Court of Australia (FCA) today granted approval for TPG and Vodafone Hutchison Australia (VHA) to proceed with their proposed merger, combining the fixed-line communications and mobile assets of the two businesses. VHA had sought authorisation from the Court to allow the transaction to proceed following the Australian Competition and Consumer Commission’s (ACCC) rejection of the proposed merger during its informal merger clearance deliberations.
The ACCC – both in rejecting informal merger clearance and in arguing that authorisation should not be granted – stated its belief that the proposed transaction raised competition concerns. The ACCC argued that in the absence of the merger TPG would enter the mobile market as a mobile network operator, and that the merger would therefore substantially reduce competition in the retail mobile. Prior to the merger announcement TPG had announced its intention to deploy a mobile network. However, subsequent to the merger announcement TPG announced that it would cease the network deployment, citing the Government’s prohibition on the use of Huawei equipment in 5G networks.
In handing down its judgement the FCA dismissed these concerns, finding that in the absence of the merger TPG would not be likely to deploy a mobile network: “TPG’s ship has sailed in the retail mobile market in Australia.”
Frontier Economics (Asia-Pacific) and Frontier Economics (Europe) were retained by solicitors for the merging parties – Herbert Smith Freehills and Norton Rose Fulbright– to provide expert economic and competition policy advice and modelling as input to both informal merger clearance submissions as well as its application to the FCA requesting authorisation. Prof. Stephen Gray appeared before the FCA as an expert witness on behalf of VHA, Mr David Foster appeared before the FCA as an expert witness on behalf of TPG and Mr Warwick Davis submitted an expert report to the Court on behalf of TPG.
Frontier Economics regularly advises clients on a range of competition matters.