TPG Telecom (ASX: TPG) has today announced that it has entered into a strategic arrangement with Vocus to sell a significant portion of its fiber network and fixed business to Vocus for cash of $5.25 billion. This deal has enabled Vocus, owned by Macquarie Infrastructure and Real Assets and Aware Super, the digital infrastructure provider, to gain deeper routings in the Australian telecommunications sector.
The deal would result in Vocus acquiring TPG’s complete fiber network along with the Enterprise, Government, and Wholesale fixed business. That fixed business includes the high-speed broadband operator, Vision Network. Such a transaction is likely to bring up to $4.75 billion in cash inflow to TPG, thus strengthening the balance sheet of the firm.
The deal follows TPG’s decision earlier this year to abandon a more complicated $6.3 billion sale that included the leasing back of its non-fiber assets to Vocus last year. TPG Telecom will retain its mobile radio network infrastructure and its consumer and mobile businesses, including fixed wireless services.
In an attempt to preserve the synergies of operations, Vocus would supply fixed network services back to TPG for an annual fee of $130 million. This allows TPG to continue delivering its services to its customers while preserving TPG’s current infrastructure.
TPG Telecom Chief Executive Iñaki Berroeta said the deal is part of a strategic review seeking to optimize its assets portfolio. “This transaction makes our operating model simpler while unlocking the value from our fixed infrastructure,” he said. Berroeta described the deal as coming as a boon for large customers in Australia, where Vocus could grow its connectivity offerings to enterprises.
The deal is expected to close in the second half of 2025. It is subject to regulatory approval. Nearly 560 TPG Telecom employees will be transferred to Vocus as part of this deal. TPG would use this amount to strengthen capital management and future business investment. Financial impact of the sale includes a decline in EBITDA of $429 million and in operating free cash flow of $334 million.
The deal includes a 15-year Transmission and Wholesale Fibre Access Agreement ensuring TPG remains in beneficial economic conditions with regard to the price of its fiber network.
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