Vodafone Hesitates Whether to Withdraw from TPG

According to local Australian media reports, Vodafone Group is considering selling its stake in Australian telecommunications company TPG Telecom.
According to the Australian Financial Review, Vodafone’s bosses are closely monitoring TPG’s stock price as they are considering exiting the third ranked company in the market.
Since its merger with ISP TPG in July 2020, Vodafone and Hutchison 3G Australia have jointly held 50.1% of the shares in this fixed and mobile operator.
Under the leadership of newly appointed CEO Margherita Della Valle, Vodafone’s UK parent company has sold multiple assets to reduce debt and restructure its massive business.
Della Valle has stated that the company will be limited to “markets that we believe combine sustainable market structures with sufficient scale to achieve growth and provide returns above our cost of capital.”

If these conditions are not met, the company will take action.
The Australian telecommunications led, low growth market is clearly ripe for action, especially after TPG suffered a major setback last year.
Firstly, regulatory authorities have rejected its network sharing transactions with Australia Telecom; On the other hand, Vocus has given up the opportunity to purchase a large amount of fiber optic assets from TPG. Since the merger, the company’s stock has fallen by 40% and its financial performance has been moderate, so the operator needs some new choices.
In the first half of this year, the company’s EBITDA increased by 12% and revenue increased by 4.5%. The net profit was AUD 48 million (USD 32 million), lower than AUD 167 million (USD 111 million) in the previous year, due to tax losses caused by the sale of tower assets.
TPG’s stock price rose 0.78% on Monday, with a cumulative increase of 4% over the past month. Vodafone’s market value in TPG is AUD 9.5 billion (USD 6.3 billion), and selling its 25% stake in TPG will generate approximately AUD 2.4 billion (USD 1.6 billion) in revenue.
Worldwide, Vodafone is waiting for approval to merge with Three UK. Last October, the company sold its Spanish subsidiary to Zegona for 5 billion euros (5.5 billion US dollars).