What you need to know about the Amcom Telecommunications Limited & Vocus Communications Limited merger

Amcom Telecommunications Limited (ASX:AMM) and Vocus Communications Limited (ASX:VOC) have been given official approval on their proposed tie-up.

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The final piece of the puzzle fell into place for Amcom Telecommunications Limited (ASX: AMM) and Vocus Communications Limited (ASX: VOC) yesterday afternoon, with the telcos receiving the green-light to go ahead with their merger.

Despite the best efforts of TPG Telecom Ltd (ASX: TPM) to derail the tie-up by building a significant blocking stake in Amcom’s shares, shareholders voted in favour of the merger proposal, defying the near impossible odds of that outcome actually occurring. All that was needed to make the tie-up official was permission by the Federal Court, and that approval came unopposed in Perth yesterday afternoon.

As part of the transaction, Amcom shareholders (those on the register at 7:00pm on 1 July 2015 – Perth time) will receive 0.4614 new Vocus shares for every Amcom share held on that date. The fact that Vocus is funding the acquisition with scrip (shares) is great for Amcom shareholders who will be able to enjoy the benefits and future growth of the new, combined entity.

As it stands, the merger will create a $1.2 billion telecommunications giant, fit to compete with the likes of Telstra Corporation Ltd (ASX: TLS), Optus and TPG Telecom – the latter of which will be one of the group’s biggest shareholders.

There are also natural synergies that will be realised from the tie-up, considering that Sydney-based Vocus has a strong presence on the east coast of Australia, while the Perth-based Amcom is more dominant in the west.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. You can follow Ryan on Twitter @ASXvalueinvest The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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