TPG Telecom has been offered a whopping $6.3 billion to sell some of its fibre networks to Vocus.
👉 Background: Vodafone and TPG merged back in 2020... to become TPG Telecom. The idea was that Vodafone would help grow TPG's consumer arm and TPG would help with Vodafone's fixed line footprint.
👉 What happened: But by December 2022, TPG Telecom was carrying $3.6 billion in net debt. So, they decided to sell off $950 million of mobile towers and other infrastructure.
👉 What else: Now, they've been offered a whopping $6.3 billion to sell some of its fibre networks to Vocus. And, this asset divestiture would clean out its major debts in a pretty big way.
💡Asset divestiture is when a company sells some of its assets... often when these assets are either underperforming or non-core.
💡While infrastructure appeared to be core to TPG in the past, they're clearly willing to forgo these assets to focus on shrinking to greatness in the consumer space. And as the 3rd biggest in the market, they want to take it up to Optus and Telstra.
💡By selling these assets, TPG Telecom can focus on their main operations and grow their customer base under the Vodafone brand. And, clearly investors were excited by this — TPG's share price jumped to its highest price in over a year.
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