M2 shareholders have overwhelmingly backed a merger with Vocus Communications. More than 99 per cent of votes endorsed the deal at a shareholder meeting today.
Under the deal, Vocus is set to acquire all of M2’s shares. M2 shareholders will receive 1.625 Vocus shares for each M2 share.
If the deal receives the go-ahead at a 5 February court hearing, 8 February is set to be the last day M2 shares will trade on the ASX.
The deal was unanimously backed by M2’s board.
“The two companies contribute complementary assets to create a merged group which is expected to have improved position to manage margins, sales and marketing against increasing competition,” M2 chairperson Craig Farrow said in remarks prepared for today’s meeting.
“M2 brings to the Merged Group demonstrated sales and marketing capabilities, well-recognised consumer and business brands, strong cashflows and scale. Vocus brings extensive fibre networks and international transmission capacity and connectivity, which underpin its credentials in the corporate and government market segments.”
The two companies have argued that the merger will create more rather than less competition in the telco market. The Australian Competition and Consumer Commission in November gave the deal the green light.
Vocus last year acquired Amcom. In 2014, it acquired New Zealand-based fibre provider FX Networks for $107.7 million.
However M2's attempt to merge with iiNet failed.
For FY15 M2 reported full year revenue of $1.12 billion. Vocus reported revenue of $149.8 million.
The post-merger Vocus will be Australia’s fourth largest telco.