RIYADH, 27 June 2007 — Saudi Telecom Co. (STC), the largest Arab telecom firm, is to buy 25 percent of Malaysia’s Maxis in a $3 billion deal to gain access to Indonesia and India, and complete Southeast Asia’s biggest buyout.
STC, battling growing competition in its home market, said it would buy into Malaysia’s largest mobile operator by investing in tycoon Ananda Krishnan’s firm Binariang, Maxis Communications’ biggest shareholder.
The Saudi firm will also take 51 percent of Maxis’s Indonesian unit and invest in its Indian network, getting access to 1.4 billion people in two of the world’s four fastest growing mobile markets.
“This is the transaction of a lifetime,” Saudi Telecom Chairman Mohamed Al-Jasser told reporters. Saudi Telecom’s part of the deal, which it valued at SR11.4 billion ($3.04 billion), would be funded in equal parts by debt and cash, Jasser told Reuters.
The Saudi operator would consider increasing its stake in Maxis to a maximum 30 percent allowed in Malaysia, Chief Executive Saad Al-Duweish said, declining to give the price it paid per share.
Krishnan has teamed up with other Maxis shareholders to buy the 41 percent of Maxis they do not own in a $4.7 billion bid that priced the stock at 15.60 ringgit per share.
Analysts have said the deal was prompted by the huge capital demands of Maxis’s overseas expansion plan, which could run into resistance from other shareholders. Maxis said last month it needed up to $4.4 billion in capital expenditure.