Vodafone share price: merger with TPG Telecom agreed

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Vodafone (LON:VOD) has today announced plans that itself and its partner company, Vodafone Hutchison Australia will merge with TPG Telecom. Vodafone and Hutchison will own will hold 50.1 per cent of TPG ‘Telecom Limited’ and TPG will own 49.9 per cent.

TPG Merger is good news for Vodafone’s Australian network

Vodafone Hutchison (VHA) has struggled to gain the same level of success it enjoys here in the UK, with rising costs and increasing market competition being responsible for VHA’S loss of AUS$92.3m reported in the first half of 2018.

Currently trading at 169.08p, down 2.23 per cent as of BST 11.12, Vodafone PLC (LON:VOD), like many other companies on the Index, is struggling to gain momentum as GBP strength soars.

Merger makes top 3 a combined worthy adversary for current market leaders

The news of the merger will see the three companies combine to form a new company, TPG Telecom which will provide a notable challenge to Telstra and Optus who currently dominate the Australian telecoms market. The proposed new company TPG, will benefit from substantial cost savings and cross sales as they combine operations.

Deal subject to approval from the Foreign Investment Board

Whilst the deal is still subject to approval from the Foreign Investment Board, it could signify huge profit gains for Vodafone, with VHA Chief Executive Inaki Berroeta stating:  "The combination of our two highly complementary businesses and talented employees will create a more sustainable company, with enhanced capacity to invest in new technology and innovation.” He continued: "We are confident that this merger will be highly beneficial to customers, shareholders and other stakeholders.” as reported in Sky News.

As of 12:55 BST, Thursday, 30 August, Vodafone Group plc share price is 230.03p.

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