TPG has agreed to sell Vocus its fibre and fixed network infrastructure assets for $5.25 billion. The acquisition affects TPG’s enterprise, government, and wholesale activities, as well as Vision Network, its residential fixed access arm, and its submarine company. As part of the agreement, over 560 TPG employees will join Vocus.
TPG expects to finalize the deal in the second half of Fiscal Year 25. TPG will pay Vocus $130 million per year for fixed network services, according to the contract.
Vocus originally proposed $6.3 billion in August 2023, but the acquisition fell through owing to complexity and disagreement. TPG CEO Iñaki Berroeta stated that the sale implies “a smaller asset perimeter,” resulting in a simpler operational structure.
TPG will receive between $4.6 billion and $4.7 billion in net cash from the deal. It intends to use the proceeds for capital management and future business investments. TPG will keep its consumer and enterprise mobile businesses, as well as its fixed retail operations.
As part of the deal, TPG and Vocus will enter into a 15-year Transmit and Wholesale Fibre Access Agreement (TAWFA). This enables TPG to maintain “owner incentives” on its fibre network. Prices will be adjusted for inflation and fixed to cover network expansion costs.
This arrangement is game-changing for Vocus. It plans to more than triple its urban fibre footprint and double its submarine cable network. Vocus interim CEO Jarrod Nink described it as a significant step toward increasing competition in Australia’s telecommunications sector. Before the deal to go through, regulatory permission and an internal reform at TPG are still required.