Orcon Group - formerly known as Vocus NZ - currently has a potpourri of brands in its stable, including Orcon, Slingshot, 2Talk and Flip.
The Herald understands that while 2degrees will be the "hero brand" and "employment brand" for the combined business, it's still possible that Orcon, Slingshot and other sub-brands will persist. Details will be finalised with the integration, assuming the deal is approved.
IPO of merged business 'off the table'
As they entered merger talks - first revealed by the Herald in October last year - Orcon Group and 2degrees put their respective IPO plans on hold.
Asked on January 13 if the merged business will list on the NZX, an Orcon Group spokesman said, "There are no plans to IPO". This morning, an Orcon insider upgraded that to a hard "no". "There are no plans for an IPO. It's off the table," he said.
Jarden head of research Arie Dekker later told the Herald he thought a listing was "unlikely".
Previously, Orcon Group and 2degrees faced a degree of capital constraint, given their respective corporate parents carried relatively heavy debt loads.
But in July last year, ASX-listed Vocus Group was sold to Voyage Australia - a joint venture between ASX-listed Macquarie Group and Australia's largest superannuation fund, Aware Super.
Macquarie and Aware Super have deep pockets, Dekker said, giving Vocus NZ and its presumed purchase 2degrees better access to capital as 2degrees looks to offer its first 5G service this quarter and bid in the 5G spectrum auction due later this year. So a primary motivation to list - raising funds - was no longer a factor.
Beyond two CEOs being streamlined to one, there was no immediate word on the degree of consolidation that would occur further down the food chain.
2degrees has 1200 staff today, Orcon Group 590.
Earlier, Associate Professor Chris Noonan, who lectures in competition and company law at the University of Auckland, told the Herald he saw little prospect that the Commerce Commission would block a 2degrees-Orcon Group deal.
2degrees has its own mobile network but is relatively weak in fixed broadband. Orcon Group has no mobile network but is the number three player in fixed broadband and owns its own nationwide fibre network. Together, they would increase market competition by forming a stronger number three against market leaders Spark and Vodafone NZ (today, 2degrees is the third largest retail telco by revenue and Orcon number four).
Economist and AUT senior research fellow Richard Meade said a combined 2degrees-Orcon Group could also boost competition in the power market, given Orcon owns a small electricity retailer, Switch Utilities - and could extend its power bundling to those who are 2degrees customers today, giving it more scale.
The fact that there is so little crossover between Orcon and 2degrees businesses, and a focus on growth, is expected to both ease regulatory approval and minimise job losses during any restructuring.
Aue was formerly 2degrees chief financial officer and before that CFO for Vodafone NZ and CFO for Vodafone Global Enterprise.
Callander headed Vocus NZ as well as serving as an executive director of the telco's Australasian operation and head of its wholesale operation on both sides of the Tasman. The telco industry veteran received $8.4m in compensation for lost long-term bonus stock options with Vocus Group's A$3.5b sale to Voyage Australia.
Cairns out of the picture
In July last year, 2degrees said that Port of Tauranga CEO turned professional director Mark Cairns would chair its board if its listing went ahead. This morning, an Orcon insider said there were no plans "at this stage" for Cairns to be on the board of the combined company.
Late last year, 2degrees moved most of its staff to a new headquarters in Fanshawe St in Auckland's CBD - part of a new office complex built by Mansons, with custom-designed open and shared workspaces for the telco.
It is just 500m from Orcon Group's HQ, which is also relatively new.
An Orcon insider told the Herald, "We need to see what the working model looks like post-Omicron and anything else that comes up. We also have offices in Wellington and Christchurch, and staff there need a base – so we'll work through all of this."
