Telco Vocus is set to increase its standing in the industry with a $653 million takeover of its larger rival Amcom.
The two companies have agreed to a deal in which Vocus will take the 90 per cent of Amcom shares it does not already own to create a company with assets across Australia and New Zealand, and about 3,750 customers.
Vocus chairman David Spence said the two companies share similar operations, including fibre networks and data centres in capital cities.
"It's a good time to be in this digital economy, the growth rates in this part of the industry are excellent at the moment," he said.
"Putting these two companies together, with Vocus being very strong on the east coast and very strong in New Zealand, and with Amcom over on the west coast and in Darwin and Adelaide, creates a new, truly national telecommunications infrastructure provider."
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The merged company would have a market value of $1.1 billion, making it the country's seventh largest telco, behind the likes of Telstra, Optus, TPG and iiNet.
The deal, which needs approval from Amcom shareholders, offers them a portion of a Vocus share for every Amcom share they hold, which values their shares at $2.45 each.
That is a premium of about 30 per cent on the value of Amcom shares before a takeover proposal was announced in October.
shareholders are expected to vote on the proposal in the first quarter of 2015.
