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The merger will result in formation of fully integrated telecommunication operator in Australia.

Ben McIntosh, Vodafone's chief commercial officer, said in a statement sent to CNET that the merger "will create even more opportunities for us as a combined entity to drive value for Australian customers".

Shares in TPG Telecom surged another 18% plus yesterday after the company revealed details of its planned merger with Vodafone Australia via a scheme of arrangement.

The deal is expected to be completed next year, subject to approval from regulators including the Foreign Investment Review Board and competition watchdog.

At 0200 AEST on Thursday, Hutchison shares had jumped 48 percent taking them to 0.18 Australian dollars (0.13 US dollars) per share, while TPG bounced 15.04 percent to 9.06 Australian dollars (6.60 USA dollars) per share. It has a mobile customer base of approximately 6 million subscribers. Additionally, the combined entity will benefit from revenue synergies through cross-selling of products across both VHA and TPG's corporate and consumer customer bases.

The merger brings new intensity to Australia's fiercely competitive telecommunications industry, which is dominated by market leader Telstra and rival Optus.

David Teoh, now CEO and chairman of TPG, will be the chairman and Inaki Berroeta, current CEO of VHA, will be the managing director and CEO of TPG Telecom, Vodafone said in a statement.

TPG will hold the rest of TPG Telecom Limited, which will be recorded on the Australian Securities Exchange.

"Together, TPG and VHA will provide stronger competition in the market and greater choice for Australian consumers and enterprises across fixed broadband and mobile".

Nick Read, CEO-designate of Vodafone, said: "This transaction accelerates Vodafone's converged communications strategy in Australia and is consistent with our proactive approach to enhance the value of our portfolio of businesses".

The merger creates a $15 billion company, big enough, the partners say, to take on the top two telcos, Telstra and Optus.

Today's announcement comes just ahead of the deadline - tomorrow at 5pm - to lodge applications to participate in the government's auction of 3.6GHz spectrum, which is one of the key bands for early 5G services.

TPG CEO David Teoh will be the company's chairman, and Vodafone CEO Iñaki Berroeta its chief executive and managing director.