The ACCC will not oppose Vocus Communication’s proposed acquisition of M2 Group saying the two companies have limited overlaps in business and the deal will consolidate a fourth player in the market.
Rod Sims, ACCC chairman, says the ACCC concluded ‘that this was primarily a merger between two complementary businesses’.
“Significantly, the merged firm will also face significant competition from Optus, Telstra and TPG,” Sims says. “This merger consolidates the fourth player in the market.”
The proposed acquisition will create a $3 billion full-service vertically integrated telco, with capabilities ‘relevant to every individual, corporate and government entity in Australia and New Zealand’, Vocus said in announcing the deal in September.
The ACCC says the two companies have limited overlaps in the supply of retail and wholesale fixed broadband services; the supply of retail and wholesale fixed voice services and the acquisition of transmission services and supply of data centre services.
The competition watchdog says in areas where Vocus and M2 do overlap, they tend to focus on different customers segments, with M2 primarily focused on residential and small business customers and Vocus mainly focused on large enterprise and government customers.
“Neither Vocus nor M2 are significant suppliers of wholesale transmission services,” the ACCC says. “Accordingly, the proposed acquisition will not significantly increase vertical integration between wholesale and retail telecommunications services providers.”
Vocus provides a range of data and voice services to customers utilising its own, and third party, networks.
M2 supplies telecommunications services to customers through its Dodo, iPrimus, Commander and Engin brands, and is primarily retail focused. It supplies telecommunications services to retail customers.