New merger in the works with Vodafone, it’s a merger of two companies, says CEO

Vodacom Ltd.

and Vodax Communications Corp. are in advanced talks to merge into a larger joint venture, the Canadian Communications and Technology Association (CCTA) said on Monday.

Vodacoins.ca reports that the two companies are in discussions to buy up to 85 per cent of Vodavax and 20 per cent each of VODA and VODU.

The companies will be known as Vodacon and Vodo, respectively.

The merger is expected to be completed by the end of this year, and Voda and Vax have agreed to an initial public offering.

VODACom’s CEO, Mike White, said in a statement that the deal will bring “a wealth of new benefits” to Canadians.

He added that the combined company will be “one of the largest telecoms in the world.”

The merger will create a “broadband telecommunications infrastructure with global reach.”

Vodalax.ca said it has not yet made a decision about the timing of the public offering, but the move is expected.

“This is an exciting moment for the Canadian telecom industry,” said Chris Wunderlich, president of the Canadian Radio-television and Telecommunications Commission (CRTC), which regulates telecommunications companies.

The combined company would be a “transformational acquisition for Canada” as the combined companies will “be able to offer the fastest speeds and best data speeds available, as well as deliver world-class customer service,” he said in an e-mailed statement.

Voda said it will continue to invest in “building the right businesses for Canadian consumers,” adding that it will offer its customers “access to the best mobile services, and support them at every stage of their service journey.”

The Canadian Radio and Telecommunications Industry Association said it was “deeply disappointed” by the news.

“The proposed merger will have a negative impact on the CCTIA, which is our industry’s most important public sector provider, and on all of our subscribers,” it said in the statement.

“While we are supportive of a merger, the combined group is clearly not in the right direction and we remain concerned about their ability to meet their ambitious merger targets.”

The two companies have been in talks to buy out Vodajax for about a year.

In a news release last month, Vodago said it is “pleased to be partnering with a Canadian company.”

The companies did not immediately respond to a request for comment.

A spokeswoman for Vodava said the merged company will focus on “building on our current strengths, delivering better value for Canadians, and enhancing Vodamac’s ability to innovate and grow.”

Vodo said in its statement that “Vodacon’s portfolio of products will deliver faster speeds, lower latency, better coverage and improved reliability.”

A spokesperson for Vodo did not respond to an email seeking comment.

White said in his statement that Vodaloq is “dedicated to providing customers the best possible services at the lowest possible prices.”

“Voda has a long history of delivering the best-in-class experience to Canadians, so we look forward to continuing to work together,” he added.

The announcement comes on the heels of a string of mergers and acquisitions that have rocked Canadian telecommunications and telecoms companies in recent years.

The Bell and Rogers merger led to a spike in price hikes for consumers, as did the merger of Bell Canada with Telus.

The merging of Telus and Telus Videotron, which was launched in 2013, has sparked criticism of the consolidation of two large telecommunications companies, particularly Bell and Videotro.

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