Vodafone New Zealand has completed the NZ$840 million ($690.4 million) acquisition of TelstraClear, after regulators gave the all-clear to the deal.
The combined entity is expected to have a roughly 26% share of New Zealand's fixed-line market, giving it the scale to make the first substantial challenge to incumbent Telecom NZ's effective monopoly on the segment.
Announcing the acquisition, Vodafone said it will initially continue to operate TelstraClear as a separate brand, while progressively melding the two companies together.
TelstraClear's former parent, Australia's Telstra, confirmed it will be receiving NZ$493 million ($405.2 million) via a pre-completion dividend on top of the purchase price.
The company will record an A$123 million ($127.5 million) foreign exchange loss on the deal, due to the current strength of the Australian dollar.
TelstraClear provides voice and data services with a fixed and enterprise focus. The agreement with Vodafone NZ was first announced in July.
Due to the scale of the deal, there had been lingering doubt as to whether New Zealand's antitrust regulator the Commerce Commission (ComCom) would approve the merger.
But ComCom yesterday revealed that it had approved Vodafone's application to make the purchase after examining its potential impact on competition.
ComCom chair chair Dr Mark Berry said the Commission determined that the merged entity would still face competition in the consumer and SMB broadband segments from Telecom NZ, as well as Orcon, Slingshot and other smaller ISPs.
There was also no significant overlap between Vodafone's and TelstraClear's businesses in the provision of mobile services or of fixed-line services to enterprises.
“As a result, the Commission is satisfied that the proposed acquisition would be unlikely to substantially lessen competition in any of the relevant markets,” Berry said.