Maxis stock faces merger cost risks as U Mobile talks revive
Published on 10/31/2026 at 02:04 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSMerger Talks Reshape Maxis Outlook
- A potential combination with U Mobile could pressure earnings, dividends and capital spending before any long-term benefits emerge.
- HLIB Research expects stronger pricing discipline and possible network efficiencies if the transaction proceeds.
- Maxis is scheduled to provide a management update at its results briefing on November 6.
Maxis is weighing a potential combination with U Mobile that could reshape Malaysia's mobile market, but the transaction would initially put pressure on earnings, dividends and capital spending. The Star reported on Friday, October 30, that Hong Leong Investment Bank Research sees a possible deal as a longer-term profitability catalyst, although an agreement remains uncertain.
Near-Term Costs Remain
According to the report, Maxis has asked selected banks and law firms to submit proposals and could appoint advisers. U Mobile's owners are seeking a valuation of around RM10 billion, below an earlier RM14 billion position, narrowing the gap with Maxis' previous offers of RM10 billion to RM12 billion.
HLIB Research said a merger could raise capital expenditure for 5G, weaken earnings and pressure dividends for Maxis and CelcomDigi. Regulatory approval could also bring conditions, while integration costs and a possible exit from Digital Nasional Berhad would add to the execution risks.
Potential Industry Benefits
The longer-term case rests on reduced price competition. HLIB Research said a combined group could bring together close to 19 million subscribers and absorb U Mobile, described as Malaysia's most aggressive price competitor. Maxis could also gain access to U Mobile's nationwide 5G network, while overlapping 4G infrastructure could eventually be rationalised.
Those savings would take several years to materialise, according to the research house. Its comparison with Thailand's mobile consolidation suggests that pricing discipline and operating margins can improve after a merger, but the outcome would depend on regulatory terms and execution.
Business Profile
Maxis is a Malaysian mobile telecommunications operator serving consumer and business customers through mobile, broadband and 5G connectivity. Its primary market is Malaysia, where it competes with U Mobile and CelcomDigi. CelcomDigi has a larger subscriber base, while Maxis remains one of the country's established network operators; YTL is another local telecommunications participant.
Maxis is due to provide a management update at its results briefing on November 6. Until the companies reach an agreement and obtain any required approvals, the merger remains a potential transaction rather than a completed combination.
