Posts Tagged ‘Telecom Operations’
Hutchison and Vodafone agree to Merge Australian Telecom Operations to form a 50:50 Joint Venture
09 February 2009
Vodafone and Hutchison Telecommunications (Australia) Limited (“HTAL”), a listed subsidiary of Hutchison Whampoa Limited (“Hutchison Whampoa”), announced today an agreement to merge their telecommunications businesses in Australia, Vodafone Australia Limited (“Vodafone Australia”) and Hutchison 3G Australia Pty Limited (“H3GA”), which 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. To equalise the value difference between the respective businesses, 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.”
Canning Fok, Group Managing Director of Hutchison Whampoa and Chairman of HTAL said: “Since its inception, 3 has established a track record of innovation – from challenging the status quo by launching Australia’s first 3G network with new services such as mobile TV and mobile internet, to changing the market with the introduction of cap plans. Combining with the strengths of Vodafone in Australia means that our partnership will deliver leading propositions, products and services to Australian businesses and consumers across the full range of their mobile communications needs.”
Transaction benefits
The transaction creates a stronger mobile operator better positioned to compete in the Australian telecommunications market with approximately 6 million customers and combined total revenues of approximately A$4 billion for the twelve months ended 30 June 2008.
Utilising existing network arrangements and planned network build, VHA will operate an advanced and comprehensive mobile network with at least 95% population coverage, of which 63% will have access to high speed 3G services. Upon completion of additional network roll outs, VHA’s 3G population coverage is planned to increase to 95%.
Drawing from the best offerings of both Vodafone and 3, VHA will have an even broader product offering, and will continue to provide innovative consumer and business services to the Australian market.
The in-market nature of the transaction is expected to create significant value. Economies of scale across procurement, product development, IT, network, commercial operations and administrative expenses are expected to deliver significant cost savings. The net present value of operating expense and capital expenditure synergies is currently expected to be in excess of A$2 billion, net of integration costs.
The transaction is expected to be enhancing to HTAL’s and Vodafone’s adjusted earnings per share, as well as to the consolidated EBIT performance of Hutchison Whampoa’s 3 Group, from the first full year post completion (after synergies and excluding the impact of intangible asset amortisation and one-off costs).
Management
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.
Other transaction considerations
The A$500 million deferred payment will be structured as a shareholder loan from Vodafone to VHA and take precedence over any shareholder returns and over the repayment of interest and principal of any other VHA indebtedness. The loan is on an arm’s length basis and is expected to be repaid or refinanced within 18 months from completion.
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.
Board approval and HTAL Directors’ recommendation
The HTAL Board considers that the transaction is in the best interest of HTAL shareholders and has unanimously recommended that HTAL shareholders vote in favour of the transaction (and intend to vote any HTAL shares they own in favour of the transaction) subject to no superior proposal emerging and the independent expert determining that the transaction is fair and reasonable for HTAL shareholders.
Implementation Agreement
The parties have entered into an Implementation Agreement that provides for exclusivity, break fees, and a standstill over Hutchison Whampoa’s shares in HTAL. These arrangements are summarised in the attachment to this release.
Conditions to completion
The transaction is expected to close by mid-2009, subject to the approval of the Foreign Investment Review Board, clearance from the Australian Competition and Consumer Commission and HTAL shareholders’ approval.
HTAL shareholders will be asked to approve the transaction and it is expected that an extraordinary general meeting will be held in April 2009 to enable HTAL shareholders to vote on the transaction. HTAL shareholders will shortly be sent a Notice of Meeting and Explanatory Statement (including an independent expert’s report on the transaction) which will contain detailed information relating to the transaction, including the basis for the HTAL Directors’ recommendation.
For further information:
Vodafone Group
Investor Relations
+44 (0) 1635 664447
Media Relations
+44 (0)1635 664444
Vodafone Australia
Public Relations
Greg Spears
Australia
+61 (0) 406 315 014
HTAL / 3
Investor & Media Relations
Tanya Bowes
Australia
+61 (0) 433 831 435
Hutchison Whampoa
Media Relations
Laura Cheung
Hong Kong
+852 2128 1235
About Vodafone
Vodafone is the world’s leading mobile telecommunications company, with equity interests in 27 countries and Partner Markets in more than 40 countries. As of 31 December 2008, Vodafone had approximately 289 million proportionate customers worldwide. For further information, please visit http://www.vodafone.com.
About Hutchison Whampoa
Hutchison Whampoa is a leading international corporation committed to innovation and technology with businesses spanning 56 countries. Its diverse array of holdings range from some of the world’s biggest port operators and retailers to property development and infrastructure to the most technologically-advanced and marketing-savvy telecommunications operators.
Hutchison Whampoa’s global group of companies is one of Australia’s biggest foreign investors. Throughout the world, under the 3 brand, Hutchison Whampoa’s 3 Group provides 3G services to over 19 million people in 9 countries. For further information, please visit http://www.hutchison-whampoa.com.
About Vodafone Australia
Vodafone Australia is a wholly owned subsidiary of Vodafone Group Plc. Vodafone Australia is the no. 3 mobile operator in Australia with over 4.2 million customers (including MVNO customers ). For the fiscal year ended 31 March 2008, the company recorded total revenues of A$2.4 billion and EBITDA of A$499 million2,3, implying an EBITDA margin of 20.5%. As at 31 March 2008, Vodafone Australia had total gross assets of A$2.6 billion2.
About HTAL
Hutchison Telecommunications (Australia) Limited (“HTAL”) is a subsidiary of Hutchison Whampoa and is listed on the Australian Securities Exchange with the ticker HTA. For the twelve months ended 30 June 2008, HTAL recorded total revenues of A$1.5 billion and EBITDA of A$173 million , implying an EBITDA margin of 11.8 %. As at 30 June 2008, HTAL had total gross assets of A$2.7 billion.
About H3GA
H3GA is a wholly owned subsidiary and the principal operating entity of HTAL. H3GA delivers mobile services under the “3” brand and operates HTAL’s 3G network in Australia. HTAL launched Australia’s first 3G mobile network – 3 – in April 2003, and today has over 2 million customers.
Vodafone Disclaimer
This press release does not constitute, or form part of, any offer or invitation to sell, or any solicitation of any offer to purchase any security in any jurisdiction.
Information in this press release about the yield on shares cannot be relied upon as a guide to future performance.
This press release contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to Vodafone’s expectations and future performance resulting from the proposed transaction. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as “anticipates”, “aims”, “could”, “may”, “should”, “expects”, “believes”, “intends”, “plans” or “targets”. In particular, such forward-looking statements include, but are not limited to, statements with respect to expected 3G coverage, product and service offerings, cost savings, adjusted earnings per share and synergies in operating expenses and capital expenditures. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to regulatory approvals that may require acceptance of conditions with potential adverse impacts; risk involving our ability to realise expected benefits associated with the transaction, the impact of legal or other proceedings; and continued growth in the market for mobile services and general economic conditions in Australia.
Furthermore, a review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements can be found by referring to the information contained under the heading „Principal Risk Factors and Uncertainties” in Vodafone Group Plc’s Annual Report for the year ended 31 March 2008 and „Other Information – Forward-Looking Statements” in Vodafone Group Plc’s Half-Year Financial Report for the six months ending 30 September 2008. No assurances can be given that the forward-looking statements in this document will be realised. Neither Vodafone nor any of its affiliates intends to update these forward-looking statements.
Hutchison Disclaimer
This press release Hutchison and Vodafone agree to Merge Australian Telecom Operations to form a 50:50 Joint Venture
09 February 2009
Vodafone and Hutchison Telecommunications (Australia) Limited (“HTAL”), a listed subsidiary of Hutchison Whampoa Limited (“Hutchison Whampoa”), announced today an agreement to merge their telecommunications businesses in Australia, Vodafone Australia Limited (“Vodafone Australia”) and Hutchison 3G Australia Pty Limited (“H3GA”), which 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. To equalise the value difference between the respective businesses, 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.”
Canning Fok, Group Managing Director of Hutchison Whampoa and Chairman of HTAL said: “Since its inception, 3 has established a track record of innovation – from challenging the status quo by launching Australia’s first 3G network with new services such as mobile TV and mobile internet, to changing the market with the introduction of cap plans. Combining with the strengths of Vodafone in Australia means that our partnership will deliver leading propositions, products and services to Australian businesses and consumers across the full range of their mobile communications needs.”
Transaction benefits
The transaction creates a stronger mobile operator better positioned to compete in the Australian telecommunications market with approximately 6 million customers and combined total revenues of approximately A$4 billion for the twelve months ended 30 June 2008.
Utilising existing network arrangements and planned network build, VHA will operate an advanced and comprehensive mobile network with at least 95% population coverage, of which 63% will have access to high speed 3G services. Upon completion of additional network roll outs, VHA’s 3G population coverage is planned to increase to 95%.
Drawing from the best offerings of both Vodafone and 3, VHA will have an even broader product offering, and will continue to provide innovative consumer and business services to the Australian market.
The in-market nature of the transaction is expected to create significant value. Economies of scale across procurement, product development, IT, network, commercial operations and administrative expenses are expected to deliver significant cost savings. The net present value of operating expense and capital expenditure synergies is currently expected to be in excess of A$2 billion, net of integration costs.
The transaction is expected to be enhancing to HTAL’s and Vodafone’s adjusted earnings per share, as well as to the consolidated EBIT performance of Hutchison Whampoa’s 3 Group, from the first full year post completion (after synergies and excluding the impact of intangible asset amortisation and one-off costs).
Management
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.
Other transaction considerations
The A$500 million deferred payment will be structured as a shareholder loan from Vodafone to VHA and take precedence over any shareholder returns and over the repayment of interest and principal of any other VHA indebtedness. The loan is on an arm’s length basis and is expected to be repaid or refinanced within 18 months from completion.
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.
Board approval and HTAL Directors’ recommendation
The HTAL Board considers that the transaction is in the best interest of HTAL shareholders and has unanimously recommended that HTAL shareholders vote in favour of the transaction (and intend to vote any HTAL shares they own in favour of the transaction) subject to no superior proposal emerging and the independent expert determining that the transaction is fair and reasonable for HTAL shareholders.
Implementation Agreement
The parties have entered into an Implementation Agreement that provides for exclusivity, break fees, and a standstill over Hutchison Whampoa’s shares in HTAL. These arrangements are summarised in the attachment to this release.
Conditions to completion
The transaction is expected to close by mid-2009, subject to the approval of the Foreign Investment Review Board, clearance from the Australian Competition and Consumer Commission and HTAL shareholders’ approval.
HTAL shareholders will be asked to approve the transaction and it is expected that an extraordinary general meeting will be held in April 2009 to enable HTAL shareholders to vote on the transaction. HTAL shareholders will shortly be sent a Notice of Meeting and Explanatory Statement (including an independent expert’s report on the transaction) which will contain detailed information relating to the transaction, including the basis for the HTAL Directors’ recommendation.
For further information:
Vodafone Group
Investor Relations
+44 (0) 1635 664447
Media Relations
+44 (0)1635 664444
Vodafone Australia
Public Relations
Greg Spears
Australia
+61 (0) 406 315 014
HTAL / 3
Investor & Media Relations
Tanya Bowes
Australia
+61 (0) 433 831 435
Hutchison Whampoa
Media Relations
Laura Cheung
Hong Kong
+852 2128 1235
About Vodafone
Vodafone is the world’s leading mobile telecommunications company, with equity interests in 27 countries and Partner Markets in more than 40 countries. As of 31 December 2008, Vodafone had approximately 289 million proportionate customers worldwide. For further information, please visit http://www.vodafone.com.
About Hutchison Whampoa
Hutchison Whampoa is a leading international corporation committed to innovation and technology with businesses spanning 56 countries. Its diverse array of holdings range from some of the world’s biggest port operators and retailers to property development and infrastructure to the most technologically-advanced and marketing-savvy telecommunications operators.
Hutchison Whampoa’s global group of companies is one of Australia’s biggest foreign investors. Throughout the world, under the 3 brand, Hutchison Whampoa’s 3 Group provides 3G services to over 19 million people in 9 countries. For further information, please visit http://www.hutchison-whampoa.com.
About Vodafone Australia
Vodafone Australia is a wholly owned subsidiary of Vodafone Group Plc. Vodafone Australia is the no. 3 mobile operator in Australia with over 4.2 million customers (including MVNO customers ). For the fiscal year ended 31 March 2008, the company recorded total revenues of A$2.4 billion and EBITDA of A$499 million2,3, implying an EBITDA margin of 20.5%. As at 31 March 2008, Vodafone Australia had total gross assets of A$2.6 billion2.
About HTAL
Hutchison Telecommunications (Australia) Limited (“HTAL”) is a subsidiary of Hutchison Whampoa and is listed on the Australian Securities Exchange with the ticker HTA. For the twelve months ended 30 June 2008, HTAL recorded total revenues of A$1.5 billion and EBITDA of A$173 million , implying an EBITDA margin of 11.8 %. As at 30 June 2008, HTAL had total gross assets of A$2.7 billion.
About H3GA
H3GA is a wholly owned subsidiary and the principal operating entity of HTAL. H3GA delivers mobile services under the “3” brand and operates HTAL’s 3G network in Australia. HTAL launched Australia’s first 3G mobile network – 3 – in April 2003, and today has over 2 million customers.
Vodafone Disclaimer
This press release does not constitute, or form part of, any offer or invitation to sell, or any solicitation of any offer to purchase any security in any jurisdiction.
Information in this press release about the yield on shares cannot be relied upon as a guide to future performance.
This press release contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to Vodafone’s expectations and future performance resulting from the proposed transaction. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as “anticipates”, “aims”, “could”, “may”, “should”, “expects”, “believes”, “intends”, “plans” or “targets”. In particular, such forward-looking statements include, but are not limited to, statements with respect to expected 3G coverage, product and service offerings, cost savings, adjusted earnings per share and synergies in operating expenses and capital expenditures. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to regulatory approvals that may require acceptance of conditions with potential adverse impacts; risk involving our ability to realise expected benefits associated with the transaction, the impact of legal or other proceedings; and continued growth in the market for mobile services and general economic conditions in Australia.
Furthermore, a review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements can be found by referring to the information contained under the heading „Principal Risk Factors and Uncertainties” in Vodafone Group Plc’s Annual Report for the year ended 31 March 2008 and „Other Information – Forward-Looking Statements” in Vodafone Group Plc’s Half-Year Financial Report for the six months ending 30 September 2008. No assurances can be given that the forward-looking statements in this document will be realised. Neither Vodafone nor any of its affiliates intends to update these forward-looking statements.
Hutchison Disclaimer
This press release does not constitute, or form part of, any offer or invitation to sell, or any solicitation of any offer to purchase any security in any jurisdiction.
Information in this press release about the yield on shares cannot be relied upon as a guide to future performance.
does not constitute, or form part of, any offer or invitation to sell, or any solicitation of any offer to purchase any security in any jurisdiction.
Information in this press release about the yield on shares cannot be relied upon as a guide to future performance.
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