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Telstra drops $60m bid to buy Adam Internet

David Ramli (via AFR) | July 23, 2013
Telstra said it was unable to satisfy the Australian Competition and Consumer Commission's requirements on the takeover by the end date.

Telstra drops $60m bid to buy Adam Internet
Telstra said it was unable to satisfy the Australian Competition and Consumer Commission's requirements on the takeover by the end date.

Telstra has backtracked on its $60 million deal to buy South Australian internet service provider Adam Internet after competition concerns were raised by the regulator.

Telstra said the deal, which was announced last October, had a contractual end date of June 30. In a statement its chief customer officer Gordon Ballantyne said Telstra was unable to satisfy the Australian Competition and Consumer Commission's requirements by the end date.

"We are very disappointed by this outcome. We believe this transaction would have provided real benefit to Australian consumers and would have added new competition into the broadband market," he said.

Last October, Telstra announced it was buying Adam in a transaction believed to be worth around $60 million. Adam would have become Telstra's low-cost brand across Australia.

But in January Telstra asked for an indefinite suspension of the approval process after rival ISPs and the Australian Competition and Consumer Commission raised competition concerns about the deal.

The cancellation comes just a week after Adam Internet chief executive Greg Hicks told The Australian Financial Reviewthe deal was still on and that there was no deadline for an approval.

Telstra executives have previously said it would launch a low-cost subsidiary if the ACCC rejected its purchase of Adam.

 

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