Vodafone and 3 merge Oz operations
It really was no miracle. What happened was...
Vodafone Australia and Hutchison's 3 network are giving up competing and will merge their operations into a 50:50 joint venture.
Jobs are likely to be lost as a result of the deal, but customers were told nothing would be changing fast. VHA Pty Ltd will market mobile services under the Vodafone brand but will keep rights to use the 3 brand.
To make up for the difference in value of the two companies, Vodafone will get a deferred payment of A$500m (£226.3m).
The merged operator claims 6m customers and A$4bn (£1.8bn) in turnover in 2008. The new company also claims "capital expenditure synergies" (possible cost cuts) of A$2bn (£906m) a year - this is expected to include some redundancies.
Vodafone's Asia-Pacific and Middle East CEO Nick Read will be chairman of VHA while Nigel Dews, current CEO of 3, will be CEO of VHA.
Read said the deal had nothing to do with the economic crisis, but would allow both firms to compete effectively with Optus and Telstra.
Vodafone, apart from the A$500m payment, will also receive a brand licensing fee of about one per cent a year from the new company.
The deal, subject to the usual regulatory and shareholder approvals, should close in mid-2009.
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