Major Australian telecommunications companies TPG Telecom and Vodafone's local subsidiary, have announced an 11-billion-U.S. dollar merger on Thursday.
Discussions regarding the deal were revealed earlier in the week which saw a surge in the shares of both companies, the third and fourth largest telecommunication outfits in the country.
"The merger will create a more effective challenger to (leading Australian telecoms) Telstra and Optus," TPG said, estimating that the resulting entity will be worth 11 billion U.S. dollars when the deal is finalized next year.
Vodafone Hutchinson, a joint venture between British company Vodafone Group and Hutchison Telecommunications in Australia, will own a majority stake of 50.1 percent, with TPG holding 49.9 percent.
The current companies strengths lie in different areas with TPG servicing 22 percent of Australia's broadband subscribers, while Vodafone has a 19 percent market share of mobile phone users.
Before the merger proceeds it will have to face reviews by the Australian Competition and Consumer Commission as well as the Foreign Investment Review Board.
At 0200 AEST on Thursday, Hutchison shares had jumped 48 percent taking them to 0.18 Australian dollars (0.13 U.S. dollars) per share, while TPG bounced 15.04 percent to 9.06 Australian dollars (6.60 U.S. dollars) per share.
