Report: Maxis, U Mobile Merger Talks Are Back On

On February 3rd, Bloomberg initially reported that there had been discussions in 2024 regarding a potential buyout of local telco U Mobile by fellow telco Maxis. However, these talks later stalled due to disagreements over pricing. More recently, Bloomberg has revealed that the discussions have been reignited, with sources familiar with the situation.

According to the updated report, Maxis has reached out to a select group of banks and law firms to solicit proposals for the potential merger. Maxis may soon appoint its own advisers to move forward with the process. As for U Mobile, its current owners may be seeking a valuation of RM10 billion or more for the company. This is a significant shift from their previous demand of RM14 billion. Notably, the owners of U Mobile have shown a more positive attitude towards negotiation.

Should the merger proceed, it would result in the creation of the new largest telco in Malaysia. However, there is currently no assurance that an agreement will be reached. Maxis issued a statement affirming that the company "continues to evaluate strategic opportunities and partnerships that are value accretive." They will disclose any significant developments in the future.

It is worth mentioning that Maxis currently has a market value of RM27.3 billion, while CelcomDigi, the result of a merger between two other telcos, is valued at approximately RM29 billion.

The initial 2024 report also mentioned that the owners of U Mobile had considered filing for an initial public offering (IPO) since 2021. However, this plan has since fallen through.