Hutchison and Vodafone agree to merge Australian operations
Posted on 9-Feb-2009 13:34
Filed under: News
Vodafone and Hutchison Telecommunications (Australia) Limited announced an agreement to merge their telecommunications businesses in Australia.
Hutchison delivers its mobile services under the 3 brand. Both Vodafone and HTAL will have an equal ownership of 50% in the joint venture, which will be renamed VHA Pty Limited (VHA). VHA will market its products and services under the Vodafone brand, but will retain exclusive rights to use the 3 brand in Australia during a transition period and thereafter.
Vodafone will receive a deferred payment of A$500 million from VHA.
Commenting on the transaction, Vittorio Colao, Chief Executive of Vodafone, said: "This transaction will benefit customers in Australia as it creates a company with the necessary scale to compete strongly in the mobile market. Customers can look forward to a wider portfolio of voice and data services, delivered under the Vodafone brand over a high quality network, which through ongoing investment will bring 3G coverage to around 95% of the population. This is an important step in the transformation of the Australian mobile industry.
The Chairman of VHA will be Nick Read (CEO of Vodafone Asia-Pacific & Middle East Region), the CEO will be Nigel Dews (currently CEO of HTAL and H3GA) and the CFO will be Dave Boorman (currently CFO of Vodafone Australia). Russell Hewitt (currently CEO of Vodafone Australia) will be a non-executive Director of VHA.
Vodafone will receive an annual brand licensing fee from VHA equivalent to 1% of service revenues.
Following completion of the transaction, Vodafone, HTAL and Hutchison Whampoa will account for VHA as a joint venture.