Keppel will sell M1’s telco business to Simba for S$1.43 billion
The deal is expected to benefit consumers through market consolidation and harnessing synergies between M1 and Simba.
Note: This article was written by Tay Hong Yi and first appeared in The Straits Times on 11 August 2025.
Asset manager and operator Keppel said on Aug 11 it is selling the telecom business of its subsidiary M1 to rival Simba Telecom, in what is the first telco consolidation in Singapore’s history.
The deal has an enterprise value – which includes cash and debts – of $1.43 billion, subject to post-completion adjustments.
Keppel will receive nearly $1 billion in cash proceeds for its 83.9 per cent effective stake in M1.
It will retain M1’s “fast-growing” information and communications technology business, which it said will complement Keppel’s integrated connectivity business, which includes data centres and subsea cables.
Keppel said it hopes to conclude the transaction in the next few months – subject to approval by the Infocomm Media Development Authority.
It said approval from Keppel shareholders is not required, as the relative figures from the proposed transaction do not exceed 20 per cent of Keppel’s net asset value, profit before tax and market capitalisation.
Approval from Simba shareholders is also not required for the deal, Keppel added. Simba is owned by Australia-listed telco Tuas.
Keppel said in a statement: “The proposed landmark transaction is expected to benefit Singapore’s telecommunications sector and consumers through market consolidation and harnessing synergies between two of the nation’s agile and digitally driven telcos with strong track records for innovation.
“It brings together M1’s digitally transformed, cloud-native network with its ability to deliver hyper-personalised services through an advanced tech stack, and Simba’s innovative digital consumer model.”
Keppel said Simba put forward the strongest bid from among interested parties, with a compelling all-cash offer at an attractive valuation.
Simba and M1 also have the least overlap in resources, which Keppel said is expected to create further revenue pools and career opportunities.
The pooling of resources is set to create a nimble and competitive digital-first telco to power Singapore’s digital economy, Keppel added.
The transaction represents an implied valuation of 7.3 times enterprise value to earnings before interest, taxes, depreciation and amortisation (Ebitda).
The sale has been widely anticipated by market watchers, though speculation had centred on StarHub instead of Simba as the likely buyer up till the latest announcement.
M1’s operations, excluding the businesses that Keppel intends to retain, recorded revenues of $806.1 million and Ebitda of $195.4 million in the fiscal year ended April.
Keppel said: “The proposed divestment is in line with Keppel’s strategy as an asset-light global asset manager and operator, and will sharpen the company’s focus within its connectivity segment on digital infrastructure.
The divestment will result in an accounting loss of $222 million, over the target assets’ book value, computed on a pro forma basis, Keppel estimated. This assumes the proposed transaction had been effected on June 30.
“The actual loss on divestment to Keppel on completion will depend on the consideration, which is subject to post-completion adjustments and the carrying value of the assets relating to proposed transaction,” it said.
Despite the accounting loss, Keppel said the divestment “crystallises value from Keppel’s investment in M1 over the years”.
Keppel expects to receive more than $700 million in cumulative cash, after considering its initial investment in M1 in 1994 as one of its founding members and the subsequent privatisation of the telco in 2019, as well as dividends and divestment proceeds from 1994 to 2025.
Shares of Keppel were halted from trading on Aug 11 before the announcement. They closed down 0.8 per cent at $8.58 on Aug 8.
Simba’s parent Tuas said the acquisition will be funded by a mix of existing cash, equity raising and fully underwritten bank debt financing.
The equity raising of about A$416 million (S$348.4 million) comprises an institutional placement of about A$366 million and a share purchase plan for eligible shareholders totalling up to A$50 million.
Source: The Straits Times