Vodafone New Zealand has completed its NZ$840 million ($690 million) takeover of TelstraClear, giving it a fixed-line business to complement its mobile-phone operation and allowing it to better compete with market leader Telecom New Zealand.
The transaction received regulatory approval earlier this week after authorities judged there would be no lessening of competition in fixed-line and broadband markets as a result of the acquisition.
Vodafone (Auckland, New Zealand) has reportedly said it will run TelstraClear (Wellington, New Zealand) as a separate unit for half a year but offer its services under the Vodafone brand within the next 18 months.
Russell Stanners, the chief executive of Vodafone, is to head up the combined company, while TelstraClear boss Allan Freeth is to quit his role this week.
Vodafone is likely to announce redundancies following the takeover, given staffing overlaps between the two organizations.
Vodafone currently has a workforce of 1,900, while TelstraClear employs 1,300 staff.
The deal will give Vodafone a 30% share of the country’s telecoms market, with Telecom New Zealand (Wellington, New Zealand) serving about 50% of it, and enable Vodafone to provide a more complete range of services to its customers.
It also marks the departure of Australian incumbent Telstra (Melbourne, Australia) from New Zealand.
TelstraClear generated about $415 million of Telstra’s revenues of $25.4 billion last financial year, about 3% less than its contribution the year before.
Like Telstra, Telecom New Zealand has been forced by authorities to separate its network operations from the rest of its business, and some analysts believe it could even become a takeover target for the Australian company, according to a Reuters report.