Keppel announced that it has, through its subsidiaries, entered into a share purchase agreement to divest M1’s telco business to Simba Telecom (Simba) for an enterprise value of S$1.43 billion, subject to post-completion adjustments.
Keppel will receive close to S$1.0 billion in cash proceeds for its 83.9% effective stake in M1, while retaining M1’s fast-growing ICT business which complements Keppel’s integrated connectivity business, including data centres and subsea cables. The transaction represents an attractive implied valuation of 7.3x EV/EBITDA.
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. Together, they could pool resources for more synergies on network and infrastructure, creating a nimble and competitive digital-first telco to power Singapore’s digital economy.
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. Despite an estimated accounting loss to Keppel of S$222 million, the transaction crystalises value from Keppel’s investment in M1 over the years. Taking into account Keppel’s initial investment in M1 in 1994 as one of its founding members, the subsequent privatisation of M1 as well as dividends and divestment proceeds from 1994 to 2025, Keppel is expected to receive cumulative cash of more than S$700 million with the Proposed Transaction. Keppel also continues to retain M1’s ICT business and certain assets excluded from the Proposed Transaction.
Simba had put forward the strongest bid from among interested parties and its combination with M1 is expected to create further revenue pools and career opportunities as they have the least overlap in resources. Simba’s bid is a compelling all-cash offer at an attractive valuation, reflecting Keppel’s successful transformation of M1 from a traditional telco into a digital first network operator since its privatisation in 2019.
Keppel hopes to complete the Proposed Transaction over the next few months, subject to regulatory approval by Singapore’s Infocomm Media Development Authority. As the relative figures in respect of the Proposed Transaction computed on the bases set out in SGX Rules 1006 (a), (b) and (c) do not exceed 20% of Keppel’s net asset value, profit before tax and market capitalisation, the approval of Keppel’s shareholders is not required. The approval of Simba’s shareholders for the Proposed Transaction is also not required.
Loh Chin Hua, CEO of Keppel
The Proposed Transaction offers a strategic path to sustainable growth for Singapore’s telco sector. M1 and Simba are a highly synergistic combination — together, they can scale more efficiently, optimise infrastructure, and accelerate 5G and digital investments, greatly enhancing service quality while contributing to a more resilient, future-ready telco industry. For Keppel, the divestment of M1’s telco business is the latest step in our transformation, as we simplify our business and advance our strategy and focus as a global asset manager and operator. It is over and above the S$14.4 billion non-core portfolio that we have identified for monetisation, and the cash of close to S$1.0 billion to be unlocked can be channelled to growth opportunities aligned with the New Keppel, lower our debt or reward our shareholders. This will not only improve the New Keppel’s ROE but also support the market’s further re-rating of Keppel.
