Difficulties in Value Creation: Telecom New Zealand's Acquisition of Aapt Ltd.

Date
2006
Authors
Toth, Zoltan
Supervisor
Tourani-Rad, Alireza
Item type
Dissertation
Degree name
Master of Business
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Publisher
Auckland University of Technology
Abstract

I provide an overview of the Australian and New Zealand telecommunications markets through Telecom New Zealand’s (TCNZ) acquisition of AAPT Ltd in 2000 which amounted to more than NZ$2 billion. Few years later and after writing off approximately NZ$1 billion, TCNZ is considering a sell-off at a considerable loss. I discuss the strategic reasons behind the acquisition and explain how smaller telcos are struggling to compete with the incumbent telecom in Australia. I further conduct an event study to assess the impact of the acquisition on both TCNZ’s and AAPT’s share prices and look at some of the post-acquisition issues. I finally provide a valuation analysis on the AAPT business.

Description
Keywords
Telecom Corporation of New Zealand , AAPT Limited , Consolidation and merger of corporations , Telecommunication
Source
DOI
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