Vodafone to acquire NZ operator
Vodafone Group Plc has announced that Vodafone New Zealand has entered into an agreement to acquire TelstraClear Limited (“TelstraClear”), the New Zealand business of Telstra Corporation, for a cash consideration of NZ$840 million (£430 million). Vodafone New Zealand is the country’s largest mobile operator with more than 2.4 million customers. TelstraClear is the second largest fixed operator in New Zealand with extensive fixed network assets and capabilities. Its customer base includes government and large corporations, small and medium enterprises as well as consumers. The acquisition of TelstraClear will strengthen Vodafone New Zealand’s portfolio of fixed communications solutions and create a leading total communications company. TelstraClear owns New Zealand’s second largest fixed infrastructure, which includes a 6,600km fibre backbone connecting 19 of the country’s largest cities. It also includes an extensive local access network with 2,000km of fibre and 4,500km of copper as well as a cable TV and broadband access network passing 150,000 homes in Wellington and Christchurch. The combined business will be ideally positioned to capture the benefits of the structural changes underway in the New Zealand market. This includes the rollout of a wholesale fibre access network to 75% of New Zealanders by 2019 under the government’s Ultra-Fast Broadband Initiative, which will allow Vodafone New Zealand to purchase last mile wholesale access outside of TelstraClear’s existing footprint on equal terms with Telecom New Zealand. The transaction is expected to create significant cost and capex savings from a combination of the two companies’ networks, commercial operations and administrative functions. It meets Vodafone Group’s strict M&A criteria and is expected to be accretive to the Group's earnings per share from year two and free cash flow per share from year one, after synergies and integration costs.