By Shanti Ayadurai
KUALA LUMPUR, Feb 25: An industry veteran says that the reported stalled deal for Maxis to purchase U Mobile by Maxis, if completed, may lead to Maxis losing RM4 billion. The stalled purchase deal was highlighted in recent press from Sin Chew Daily and The Edge Malaysia.
The core concerns of the industry veteran ties directly to the U.S.-Malaysia Reciprocal Trade Agreement signed in October 2025. Article 5.2 requires cooperation on national security-sensitive tech, export controls, and alignment with U.S. standards for critical infrastructure like 5G/6G networks.
U Mobile’s 5G rollout relies heavily on Huawei (Peninsular Malaysia) and ZTE (East Malaysia). Under the agreement’s provisions, U.S.-Malaysia consultations could deem these vendors high-risk, forcing a “rip-and-replace” of equipment, mirroring U.S. programs that cost billions and take 18–24 months.
“Any valuation would be wiped out by replacement CAPEX, audits, delays, and financing hits potentially billions in extra costs for an acquired U Mobile,” the industry source said.
This risk exploded after the US Supreme Court decision on February 20, 2026 (Learning Resources, Inc. v. Trump), striking down broad presidential tariffs under IEEPA. IEEPA stands for the International Emergency Economic Powers Act, a U.S. federal law enacted in 1977 (Title II of Pub. L. 95–223, codified at 50 U.S.C. §§ 1701–1707).
It creates uncertainty around trade concessions, making security alignments (like vendor restrictions) even more critical to any ongoing bilateral benefits.
Merger talks are already stalled (as of February 24, 2026, per The Edge: U Mobile wants RM14 billion, Maxis offers RM10–12 billion; deadlocked for 4 months).
Avoiding this deal will protect Maxis from inheriting massive vulnerabilities and preserving shareholder value amid U.S. security pressures.
The Singaporean shareholder, Straits Mobile Investments Pte Ltd, a unit of ST Telemedia, which is owned by Temasek Holdings and maintains close strategic alliances with the US government through Singapore’s longstanding bilateral ties may have fortuitously preserved its financial position by divesting its majority stake in U Mobile in time. This exit, completed via the sale to Mawar Setia Sdn Bhd and supported by a RM3.8 billion syndicated financing facility from Affin Group and MBSB Bank, allowed the entity to step away from the Malaysian telecom operator amid ongoing market shifts and regulatory uncertainties in the sector tied to growing geopolitical shifts.
–WE