ASX-listed TPG Telecom (AU:TPG) has sealed a deal to sell its fixed and fiber network assets to Vocus Group for an enterprise value of $3.5 billion (AU$5.25 billion). Upon completion, TPG expects to receive net cash proceeds of AU$4.6 to AU$4.7 billion. The company intends to allocate these funds toward capital management initiatives and future business investments. TPG shares fell by over 3% as of writing.
TPG, formerly Vodafone Hutchison, provides fixed and mobile network services across Australia. Meanwhile, Vocus Group is a fiber and network solutions provider and is backed by Australian investors Macquarie and Aware Super.
TPG Telecom Offloads Assets to Vocus
Under an agreement, TPG Telecom offloaded its Enterprise, Government, and Wholesale (EGW) fixed business, including the wholesale infrastructure arm, Vision Network, to Vocus. TPG will retain its mobile businesses along with its fixed consumer and small office/home office fixed units. Additionally, Vocus will deliver fixed network services to TPG as part of this deal.
Vocus Group initially approached TPG in 2023 but was unable to reach an agreement on the commercial terms. The two companies resumed their discussions in August 2024.
The sale concludes TPG’s strategic review of its fiber network assets. It also establishes a more focused and efficient business for TPG, offering greater flexibility to optimize its capital structure.
TPG further stated that the sale would reduce its earnings before interest, tax, depreciation, and amortization (EBITDA) by AU$429 million, based on its 2023 financial results. Nonetheless, the company kept its FY24 earnings guidance unchanged between AU$1.95 billion and AU$2.02 billion, excluding significant one-offs.
The sale is expected to be completed in the second half of 2025.
Is TPG a Good Buy?
According to TipRanks consensus, TPG Telecom has received a Hold rating based on two Buy, four Hold, and two Sell recommendations from analysts. The TPG Telecom share price forecast is AU$5.04, which implies a growth rate of 2.52% at the current trading level.
