Vodafone buys TelstraClear for $840 million

Update 2: Representatives of Vodafone and TestraClear are due to speak at a media conference at 11:45; in the meantime, Vodafone has issued its own statement, chief executive Russell Stanners saying the acquisition 'gives Vodafone a compelling set of products and capabilities for consumers and businesses'.

"The two businesses are very complementary," Stanners says.

"The transaction is expected to create significant cost and capex savings from a combination of the two companies' networks, commercial operations and administrative functions. If approved, it will create a new force in the New Zealand market.

The transaction is due to be completed in the fourth quarter of this year.

Telstra has lifted its interim NZX trading halt.

Update: Telstra has confirmed it will sell its New Zealand subsidiary, TelstraClear, to Vodafone New Zealand, for a price of $840 million.

The sale, which is still awaiting regulatory approval, includes TelstraClear's voice and data-based services, its network infrastructure, and its kiwi customer base.

David Thodey, CEO of Telstra, says in a statement the sale has 'strong strategic rationale'.

"The deal is a natural one, bringing together TelstraClear's fixed telecommunications and data products and corporate client base with Vodafone New Zealand's mobile offering and retail customer base," Thodey says.

"The transaction is consistent with Telstra's overall strategy and capital management framework that we outlined in April.

Story: Telstra has halted trading of its shares on the NZX, pending the release of an announcement expected to answer speculation about a possible sale of its New Zealand division, TelstraClear, to Vodafone.

The company first announced the talks of a possible sale in May, sparking speculation about what effect the shake-up could have on the market, and whether the company could be 'clearing the decks' to make way for a purchase of Telecom.

We'll post an update when we hear more.