Australian and New Zealand wholesale IP transit and voice supplier Vocus and M2 Group have signed a merger agreement that will create the fourth-largest telecoms company in Australia by market value and the third biggest in New Zealand. The new company will be worth more than AUD 3 billion and have revenues of around AUD 1.8 billion.
Vocus said it has offered 1.625 of its shares for each M2 share, implying an AUD 1.93 billion value for M2. The price represents a 25 percent premium to the closing price for M2 shares on 25 September.
The deal, expected to generate up to AUD 40 million a year in savings, has been unanimously approved by each company’s board ahead of a shareholder vote. It will see the combination of the Vocus telecom infrastructure and corporate customer base with M2’s services in consumer and SME business segments. The companies said the transaction will also give them scale enough to take advantage of Australia’s National Broadband Network.
After the merger, M2 shareholders will own 56 percent of the combined company, which is expected to be eligible to sit in the S&P/ASX 100 index. The companies expect annual cost savings through the combination of their two networks, facilities and offices, with a one-time cost of AUD 20 million.
