Key Highlights:
- TPG Telecom (ASX: TPG) has signed a binding Share Purchase Agreement (SPA) to sell its fibre network infrastructure and Enterprise, Government, and Wholesale (EGW) fixed business to Vocus Group Limited for an enterprise value of $5,250 million.
- The deal includes a potential $250 million Contingent Value Payment, and TPG will retain its mobile radio network, Consumer and EGW mobile business, and fixed wireless retail business.
- The sale is expected to close in the second half of 2025, subject to regulatory approvals.
- Net cash proceeds of $4,650 – $4,750 million are expected, which will support future capital management and business investments.
- TPG will enter a 15-year Transmission and Wholesale Fibre Access Agreement (TAWFA) with Vocus, worth $130 million per annum.
Sydney, Australia – 23 December 2024 – TPG Telecom Limited (ASX: TPG) has agreed to sell its fibre network infrastructure and EGW fixed business to Vocus Group for a total enterprise value of $5.25 billion, which includes a potential $250 million contingent payment. The transaction follows a strategic review of TPG’s fibre network assets and will enable the company to focus more on its mobile and consumer businesses.
What’s Being Sold
The deal covers TPG’s fibre network infrastructure, including the Vision Network, as well as its Enterprise, Government, and Wholesale (EGW) fixed business. TPG will retain its mobile radio network, consumer mobile business, and small office/home office fixed retail business. Vocus will continue to provide fixed network services back to TPG under the Transmission and Wholesale Fibre Access Agreement (TAWFA).
Why This Deal Matters
TPG Telecom CEO Iñaki Berroeta emphasized the strategic nature of the deal, noting it reflects a simplified operating model and unlocks value for TPG’s fixed infrastructure assets. He added, “This transaction strengthens our financial position, creating a more focused and streamlined business with significant options for future capital management.”
The sale will also benefit large customers in Australia’s fixed telecommunications sector, as it creates a stronger competitor in the enterprise connectivity space, with expanded capabilities in international, inter-capital, regional, and metropolitan connectivity.
Key Deal Terms
- Vocus will pay TPG an enterprise value of $5,250 million, with net cash proceeds of approximately $4.65 – $4.75 billion at closing.
- TPG will enter into a TAWFA with Vocus for $130 million per year, which has a 15-year term with two 10-year extensions available at TPG’s discretion.
- TPG will also receive a potential $250 million contingent value payment, subject to certain conditions.
The deal is expected to close in the second half of 2025, pending regulatory approvals from authorities including the Foreign Investment Review Board (FIRB), Australian Competition & Consumer Commission (ACCC), and others.
Financial Impacts
For FY23, TPG estimates a $429 million decrease in EBITDA, alongside lower Operating Free Cash Flow and depreciation and amortisation expenses. While the transaction is expected to have an impact on TPG’s financials in the short term, the company remains confident in its long-term growth prospects.
