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The deal with Infratil is subject to regulatory approvals and completion is anticipated during Vodafone Group's 2020 financial year, it said.
It was reported earlier this week that there were a number of potential suitors interested int he business.
There was speculation earlier this week that Infratil was facing competition from private equity giants Blackstone, Kohlberg Kravis Roberts (KKR) and TPG Capital (not to be confused with Australian company TPG Telecom, which is attempting to merge with Vodafone Australia).
But yesterday afternoon there was also sign that an Intratil/Brookfield deal was close as Spark director Alison Gerry - who also sits on Infratil's board - abruptly quit Spark, citing a perceived conflict of interest.
The latest deal comes after the Australian Competition and Consumer Commission recently blocked an $A15 billion merger of TPG Telecom and Vodafone's Australian business, arguing it would reduce competition.
Upon competition, Vodafone Group and Vodafone New Zealand will enter a partner market agreement, which will include use of the Vodafone brand, preferential roaming arrangements, access to Vodafone's global IoT platform and central procurement function, and a range of services for the business and consumer markets.
"An important aspect of our strategy is the active management of our portfolio and deleveraging, which this transaction further demonstrates." Vodafone chief executive Nick Read said.
"We have always been proud of our Vodafone New Zealand business, which has a great team, and we look forward to a continued close relationship through our partner market agreement."
Infratil, which is managed by Morrison and Co, was put on a trading halt by the New Zealand stock exchange on Friday when it announced it was in talks with another party to buy Vodafone's New Zealand business. The stock last traded at $4.60.
In November, Vodafone New Zealand's new chief executive Jason Paris said the plan was to float the company and the target for the initial public offering was 2020. That followed an earlier failed bid to sell the business for $3.44 billion to Sky TV. That was blocked by the Commerce Commission early 2017.
Investment bank Macquarie anticipates Intratil will tap investors for more than $420m million in new equity to help fund its end of the deal.
Greg Smith, head of research at Fat Prophets, said last week that a trade sale would be a disappointment for the market, which was looking forward to Vodafone listing next year.
Another analyst did, however, told the Herald Infratil had demonstrated that it could acquire businesses and then sell down into the public markets.
One example was its acquisition of a 50 per cent stake in fuel company Shell NZ in 2010, with the New Zealand Superannuation Fund taking the other half.
After rebranding as Z Energy that company was listed on the NZX and ASX in 2013, with Infratil and the Super Fund reducing their holdings to 20 per cent each before selling out completely in 2015.
Good fit for Infratil
Buying into Vodafone would not be Infratil's first tech investment.
In 2016 it bought a half share in Canberra Data Centres (CDC) for $A392m and a year later invested a further $A50m to help fund its growth.
Last month Infratil said the value of its 48 per cent stake in CDC had risen from $487.8 million to $841-$942m.
Vodafone NZ by the numbers
For 2017 (its most recently reported financial year), Vodafone NZ made a profit of $57.5 million, turning around a loss of $18.3m. Revenue increased 2.8 per cent to $2.05b.
In the mobile market, it has around 2.4m mobile customers, putting it neck-and-neck with Spark and well-ahead of third-placed 2degrees.
In fixed-line broadband, Vodafone NZ has around 430,000 customers, putting it second behind Spark (around 670,000) and well ahead of third-placed Vocus (around 200,000).