Aussie Broadband to buy AGL's retail telco arm for $125m

Aussie Broadband is set to become Australia’s third largest provider of NBN services after entering an agreement to acquire AGL’s retail telco arm in a scrip deal valued at up to $125 million.

The telco said that after completion of the deal its broadband customer base would grow to more than 1.25 million connections.

Its mobile business will also be given a boost, growing its subscriber-base to almost 400,000 services.

The deal will see a combined total of 350,000 customers of AGL’s mobile and broadband business, AGL Telco, moved to Aussie Broadband’s network.

The transaction is expected to be finalised in June and the migration completed by the first half of the 2027 financial year.

Last August, Aussie Broadband offloaded its budget brand, Buddy, to Commonwealth Bank-backed telco Tangerine.

As part of that transaction Tangerine and its sister brand, More entered a wholesale agreement with Aussie Broadband for their 290,000 customers.

Taking into account the AGL acquisition announced today, Aussie Broadband is now firmly on track to become Australia’s third biggest NBN broadband service provider, the telco chief executive Brian Maher said.

“FY27 is set to be a year of significant growth for Aussie Broadband as we migrate approximately 350,000 broadband and mobile connections from AGL in addition to the 290,000 More/Tangerine NBN connections to be migrated in the current financial year, becoming the third largest NBN service provider," Maher said.

Aussie Broadband will take control of and continue to market telecommunications services under the AGL Telco brand.

AGL chief executive Damien Nicks said that the deal would support the utility’s strategy to bundle energy and telco services.

“We look forward to working with Aussie Broadband as we continue to improve our integrated product offering across energy and telecommunications,” Nicks said.

“We want to provide the best possible experience to customers, and we are confident that Aussie Broadband can deliver exactly that across broadband, mobile and voice services."

Under the financial terms of the deal AGL will receive an upfront payment in the form of 22 million ordinary Aussie Broadband shares valued at $115 million or 7.5 percent its total issued share capital.

AGL will receive a further $10 million worth of shares, issued in $2 million increments, on condition that it meets a number of growth milestones.

Aussie Broadband said that the deal would deliver $21 million in underlying EBITDA in its first year following the migration.