Singapore's Keppel to sell M1 stake to Simba Telecom for a net $778 million
Keppel said on Monday it will sell M1's telecoms operations for an enterprise value of S$1.43 billion, and retain the fast-growing information and communications technology business, which also includes data centres and subsea cables.
M1 and Simba are Singapore's third- and fourth-largest mobile operators by market share, trailing Singapore Telecommunications (STEL.SI), opens new tab and StarHub (STAR.SI), opens new tab.
"The proposed transaction offers a strategic path to sustainable growth for Singapore's telco sector," Keppel CEO Loh Chin Hua said in a statement.
Keppel said the deal would benefit the industry and consumers by consolidating the market and unlocking synergies between two digitally driven operators.
Backed by state investor Temasek (TEM.UL), Keppel said the divestment aligns with its strategy to operate an asset-light model, opens new tab, and will sharpen its focus on digital infrastructure within its connectivity segment.
Keppel, which first invested in M1 in 1994 as a founding shareholder, said Simba had submitted the strongest bid among interested parties, and its combination with M1 is expected to create further revenue opportunities. It said it expects to record an estimated accounting loss of S$222 million on the deal.
Loh said the proceeds can be used for Keppel's growth opportunities and lower its debt or reward its shareholders. "This will not only improve the new Keppel's ROE (return on equity) but also support the market's further re-rating of Keppel,' he added.
Shares of Keppel, which are under a trading suspension due to the deal announcement, have climbed 25.4% year-to-date, outpacing the 11.9% rise in the benchmark Singapore index (.STI), opens new tab, LSEG data showed.
Simba Telecom is wholly owned by Australia-listed Tuas (TUA.AX), opens new tab. In a separate statement, Tuas said it is looking to raise at least A$416 million ($271.15 million) through a placement and share purchase plan.
M1's operations, excluding the businesses that Keppel intends to retain, recorded revenues of S$806.1 million and an EBITDA of S$195.4 million in the year ended April.
Keppel said it hopes to complete the proposed transaction over the next few months, subject to regulatory approval.
DBS (DBSM.SI), opens new tab is the financial adviser to Keppel for the proposed deal, according to the announcement.
($1 = 1.2851 Singapore dollars)
($1 = 1.5342 Australian dollars)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
15 minutes ago
- Reuters
CK Hutchison ports deal in focus as Hong Kong conglomerate reports results
HONG KONG, Aug 14 (Reuters) - Investors will look for comments from CK Hutchison ( opens new tab on the status of its ports business sale to a consortium led by U.S. investment firm BlackRock (BLK.N), opens new tab when the Hong Kong conglomerate reports its interim results on Thursday. The ports-to-telecoms group will present its results at 5 p.m. (0900 GMT), offering analysts the first opportunity to quiz the management about the plan to sell the ports business since it was announced in March. Departing from its usual practice, CK Hutchison did not brief analysts or media about its 2024 earnings, released after it made public its plan to sell the business, which includes two ports along the strategic Panama Canal. Since the plan to sell 43 ports in 23 countries to a group led by BlackRock (BLK.N), opens new tab and Italian billionaire Gianluigi Aponte's family-run shipping firm MSC was announced, CK Hutchison has faced a firestorm of criticism from China. In the latest announcement on July 28, the conglomerate said it was in talks with the consortium pursuing its $22.8 billion ports business to add a Chinese "major strategic investor" to the bid, after their exclusive talks ended. It said changes would be necessary to secure regulatory approval in relevant jurisdictions and that it would allow as much time as needed to achieve that. Sources have told Reuters the investor was COSCO ( opens new tab - one of the world's dominant, vertically integrated marine transportation firms. They said COSCO was seeking a bigger stake while the other parties in the consortium were keen to keep it a minority. While any stake by COSCO is not yet clear, an inclusion of a Chinese investor would alleviate China's national security concerns and have its blessing, the sources and other experts have said. U.S. President Donald Trump had earlier called for the removal of Chinese ownership in the Panama Canal, which now accounts for more than 40% of U.S. container traffic valued at $270 billion annually. Ahead of the results, UBS forecast a 6% rise in underlying profit for the first six months, as ports and retail business growth and a weakening dollar offset the negative impact of oil prices. However, one-off losses, including from the completion of the 3UK merger, could weigh on the conglomerate's net profit. Morgan Stanley rated CK Hutchison "overweight" last month, citing potential strategic transactions, attractive valuation, and strong balance sheet.
Reuters
15 minutes ago
- Reuters
Focus: China pharma firms turn to local reagent suppliers to cut costs and delivery times
SHANGHAI, Aug 14 (Reuters) - Pharmaceutical research and development firms in China are increasingly interested in procuring critical supplies known as reagents from local manufacturers, industry executives and managers said, as they seek to cut costs and delivery times. Western reagent suppliers including U.S.-based Thermo Fisher Scientific and Germany's Merck ( opens new tab have profited in the world's second-largest pharmaceutical market from the compounds used in lab tests for analysis and quality control. But rising Chinese import tariffs due to the trade war with the U.S. and longer-term concerns about costs or access are spurring Chinese companies to request products from local rivals like Shanghai Titan Scientific ( opens new tab and Nanjing Vazyme Biotech ( opens new tab instead, the executives and managers said. The five who spoke to Reuters work at Chinese firms involved in the purchase or supply of reagents and their comments are an early sign of an expected industry shift toward more Chinese purchases. China's reagent market for lab and diagnostic use has been to some extent supplied by imports, which were valued at $5.76 billion in 2024, down slightly from $5.83 billion in 2023, according to U.N. Comtrade data. "It is actually more advantageous (for reagents to be local) because the timeliness requirement is high," said Ma Xingquan, co-president of pharmaceutical research firm ChemPartner PharmaTech ( opens new tab. Most reagents it uses in its pre-clinical work are products that are made in China by firms including Titan and Shanghai Aladdin Biochemical Technology ( opens new tab, he said. ChemPartner's usage of locally made reagents would probably increase further as new products become available, Ma added. The rush to use domestically made reagents has accelerated since April, the month China raised duties on U.S. goods to 125%, a manager at Titan and an executive at Vazyme said, though the levies have since been lowered as Beijing and Washington continue trade talks. Some Chinese drugmakers were worried about tariff policy uncertainty, Titan product manager Yang Dong said. Since April, more than 90% of Vazyme's customers have discussed replacing imported reagents with its products, Vazyme Senior Vice President Xu Xiaoyu said. "Before April, customers were only saying long term, they hope to be able to replace (reagents) with those locally made, it would be better," Xu said. "But to customers these tariffs are like a shock in a short period of time. They clearly felt this type of direct impact... their impetus (for replacement) will be stronger." Titan and Vazyme are both forecast to report strong sales growth this year, according to brokers. China International Capital Corp expects Titan's annual revenue to grow 22% to 3.52 billion yuan ($490.39 million) this year, while Vazyme's revenue is set to rise 15% to 1.59 billion yuan over the same period, according to Soochow Securities. "There is still a lot of room for substitution of imported biological reagent enzymes, clients are strongly interested in locally-made replacements," Soochow said in a recent note. Shares in Titan and Vazyme have risen about 54% and 18% respectively since the start of the year. Merck and Thermo Fisher shares have fallen about 21% and 8% respectively over the same period. Morningstar analyst Max Jousma expects China's reagents market to grow more than 10% annually over the next five years, driven by government support for the biotech and pharmaceutical sectors and growth in research and development activity and in-vitro diagnostic testing. Merck and Swiss diagnostics group Roche Holding (ROG.S), opens new tab are moving some of their reagent production closer to their Chinese customers. In 2023, Merck announced plans to invest 70 million euros ($81.35 million) in a reagents facility in Nantong that is on track to begin operations next year. Merck declined to comment on any short-term shifts in ordering patterns from Chinese customers. "The decision to invest in reagent manufacturing in Nantong reflects our commitment to supporting the growing needs of life science and biopharma customers in China and the broader Asia-Pacific region," it said in a statement. Roche is expanding production, laboratory and logistics facilities from 2028 in Suzhou, where it produces reagents for diagnostic systems, the company said in a statement. The expansion will help it meet increasing demand for diagnostic solutions in China and parts of Asia-Pacific, it said. Thermo Fisher declined to comment on its reagent sales and strategy to compete against local manufacturers in China, citing a policy of not providing details of its business by product line or country. Chinese drugmakers that use reagents from Western companies and are looking to purchase substitutes from local firms will face some challenges given the products are difficult to switch during or after the regulatory approval process because of a need for material consistency, industry experts said. "Switching reagents will cause significant disruption and delay for drug development," said Huang Linfeng, a scientist specialising in RNA biology at Duke Kunshan University. Another hurdle is manufacturer access to technology or processes, some of which could still be protected under patent or not disclosed, said Cheng Shaojun, a vice-general manager at supplier Fu Chen (Tianjin) Chemical Reagents Co. "(Reagent) production equipment is also not necessarily able to be bought," he added. ($1 = 0.8605 euros) ($1 = 7.1779 Chinese yuan renminbi)
Reuters
an hour ago
- Reuters
Singapore's Temasek prices $1.5 billion US dollar fixed and floating-rate bonds
Aug 14 (Reuters) - Singapore's state investor Temasek [RIC:RIC: said on Thursday its unit priced two U.S. dollar-denominated bonds totaling $1.5 billion, a day after launching the offer under its $25 billion medium-term note program. The unit, Temasek Financial (I), priced two $750 million two-year bonds, one with a 3.75% fixed rate and the other priced at a spread of 38 basis points over the Secured Overnight Financing Rate, the state investor said in a filing, opens new tab on the Singapore Exchange. The unit intends to use the net proceeds from the bond issuance to support Temasek and its investment holding companies in funding their ordinary course of business, the company said. Citi (C.N), opens new tab, Bank of America (BAC.N), opens new tab, Morgan Stanley (MS.N), opens new tab and Societe Generale ( opens new tab are the joint bookrunners.
