Sold for $1.7 billion, 2degrees poised to merge with Orcon Group

Sold for $1.7 billion, 2degrees poised to merge with Orcon Group

Deal would create a much stronger number three in the local telecommunications market.

Mark Callander (Vocus NZ)

Mark Callander (Vocus NZ)

Credit: Supplied

Telcos 2degrees and Orcon, a subsidiary of Vocus Group, are poised to merge to form New Zealand’s third largest integrated telecommunications company.

A deal announced today follows agreement between managed funds of Australia's Macquarie Asset Management and Aware Super, the owners of Vocus Group and its Orcon subsidiary, to acquire 2degrees from Toronto-listed Trilogy International Partners and Tesbrit B.V.

Trilogy told shareholders today the acquisition was expected to complete in the first half of 2022, subject to regulatory approvals. The implied enterprise value of 2degrees equated to NZ$1.7 billion. 

2degrees was seemingly pursuing an A/NZ listing before Vocus began angling for a different kind of deal two months ago.

"Over the past several months we have been focused on strategic initiatives to maximise value for our stakeholders," said Brad Horwitz, president and CEO of Trilogy. "This transaction crystalises value for Trilogy shareholders at a valuation which reflects the remarkable accomplishments of our team in New Zealand and runway for future growth,"

The merger would create a challenger with services and infrastructure across mobile, broadband, and energy. The combined company would serve more than 1.5 million mobile and 345,000 fixed line customers across 1800 mobile cell sites and 4600km of fibre to provide network coverage to 98.5 per cent of the population.

“Both 2degrees and Orcon have a long heritage in the New Zealand market,” said Mark Callander, Orcon CEO. “This transaction marks a step-change in the New Zealand telecommunications landscape and will establish a stronger player in market, and this will lead to more competition and benefits to end users."

2degrees CEO Mark Aue said combining the strengths of the businesses and the talents of their people would enable the merged business to continue to innovate and to enhance products and services and to grow the new business.

“While we finalise the details it will remain business as usual for both teams," Aue said. "Our customers will continue to receive the high-quality products, service, and support they are used to, and our people will stay focused on meeting their needs."

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Tags TelecommunicationsVocus GroupOrcon2degreesTrilogy International Partners



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