Vodafone New Zealand has announced it will acquire ihug New Zealand Ltd from iiNet for NZ$41 million.

CEO Russell Stanners says the deal further strengthens Vodafone’s position in the telecommunications market with customers benefiting from the combined strength of both companies.

“It’s a perfect fit. Right now, we are the leaders in mobile, however we only have 20% share of the telecommunications market. When combined with ihug’s strength in fixed line broadband and calling, we can develop and deliver even more compelling propositions for our customers.”

Mr Stanners says the deal is an important step in the evolution of Vodafone’s business in New Zealand. The ISP will operate as a standalone company.

“ihug already has a strong brand in the ISP broadband market which New Zealanders identify with, a capable management team and we fully support their growth plans.”

The deal was announced to the Australian Stock Exchange, where iiNet is listed.