Saudi Telecom to buy 25% stake in Maxis for $3b

Riyadh: Saudi Telecom is to buy 25 per cent of Malaysia's Maxis in a $3 billion deal that gives the Arab world's top telecom operator access to Indonesia and India, and marks southeast Asia's biggest buyout.

Saudi Telecom Co, battling growing competition in its home market, said it would buy the stake by investing in Malaysian tycoon Ananda Krishnan's firm Binariang, Maxis Communications' largest shareholder.

Krishnan has teamed up with other Maxis shareholders to buy the 41 per cent of Maxis they do not own in a $4.7 billion bid that will be southeast Asia's biggest buyout.

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.

Saudi Telecom will invest in the expansion drive after the acquisition, the company said in a statement.

Its part of the deal, which it valued at 11.4 billion riyals ($3.04 billion) would see Saudi Telecom take a 51 per cent stake in Maxis' Indonesian unit Natrindo.

Saudi Telecom and Binariang's other shareholder will together underwrite a $900 million loan to expand in India where Maxis operates through its Aircel unit, the statement said.

"This transaction represents an important step for the company's drive to become an influential player in the global telecoms sector," Saudi Telecom Chairman Mohammad Al Jasser was quoted as saying in the statement.

It did not say exactly how much it would pay for the stake in Maxis.

Saudi Telecom shares rose 2.83 per cent when trading began in Saudi Arabia yesterday. They were up 2.43 per cent at 0853 GMT.

Saudi Telecom is the only one of the five largest Gulf telecom operators that has not made foreign acquisitions, even after losing its mobile phone monopoly in 2005.