Australian team advises on largest M&A transaction of 2020 as $16.63 billion merger between Vodafone and TPG completes

Global law firm Norton Rose Fulbright has advised TPG Telecom Limited (previously known as Vodafone Hutchison Australia Limited) (ASX ticker: TPG) (TPG Telecom) on its successful $16.63 billion merger with TPG Corporation Limited (previously known as TPG Telecom Limited) (TPM) by way of scheme of arrangement. The merger, which was implemented today, is the largest M&A transaction to complete in 2020 and one of the largest ever in the Australian telecommunications industry.

After entering into a Scheme Implementation Deed in August 2018, the parties faced a significant hurdle when the Australian Competition and Consumer Commission (ACCC) decided to oppose the merger. Close to nine months later, the merger was reignited after TPG Telecom and TPM successfully challenged the ACCC decision in the Federal Court of Australia, with Justice John Middleton finding that the merger would not substantially lessen competition.

Obtaining competition clearance for the merger was just one of the many regulatory challenges TPG Telecom had to overcome to ensure the merger went ahead. Navigating the Foreign Investment Review Board (FIRB) review process was also complicated due to the national telecommunications infrastructure of the parties, while the listing of TPG Telecom on the ASX was one of the largest listings in ASX’s history.

TPM shareholders were almost unanimously supportive of the merger, with 99.99 per cent of shares voted at the Scheme Meeting being in favour of the Scheme. TPM shareholders received one share in TPG Telecom for each TPM share held, together with a fully franked special dividend of $0.516 per share. TPM shareholders also received an in-specie dividend distribution of scrip in TPM’s Singapore business which was spun off and listed on the ASX as a standalone entity under the name Tuas Limited (ASX ticker: TUA).

The Norton Rose Fulbright team was led by corporate and M&A senior partner John Elliott, corporate and M&A partner Jeremy Wickens and telecommunications and competition partner Martyn Taylor, who were principally assisted by senior associate Zoe Lonard, and associates Dean Zinn and Julia Sonza. The firm advised TPG Telecom throughout the transaction, including drafting and negotiating the key M&A transaction documents, advising on foreign investment and competition strategy, obtaining FIRB regulatory approval, listing TPG Telecom on the ASX, representing TPG Telecom at the court hearings to approve the scheme and all other legal issues underpinning the deal.

Norton Rose Fulbright partner John Elliott commented:

"This merger was unique in that it was both one of the longest running transactions in Australian corporate history, and one that had to be completed remotely during the COVID-19 pandemic. We congratulate TPG Telecom for completing such a significant transaction, and would also like to thank the full team for completing a deal that will herald a new era for Australian telecommunications.”

Following implementation of its merger, the combined TPG Telecom and TPM emerges as a fully integrated telecommunications powerhouse and challenger to the major incumbents of integrated fixed and mobile offerings in Australia.