Aussie Broadband Limited (ASX: ABB) has pulled off one of the year’s most significant telecommunications deals, securing the acquisition of AGL Energy Limited’s (ASX: AGL) entire telco business for $125 million. The transaction catapults the Victorian-based telco into Australia’s big league, positioning it as the nation’s third-largest NBN provider.
Market reaction speaks volumes. Aussie Broadband shares surged as much as 20% in early trading, marking the stock’s largest intraday gain in five months and hitting its highest level since November 2024.
The Deal Structure: Shares, Not Cash
The $125 million transaction takes an unconventional approach. AGL Energy will receive $115 million in Aussie Broadband shares upfront, translating to approximately 22 million new shares or 7.5% of the company’s total issued capital.
An additional $10 million worth of shares could be issued in $2 million tranches. These performance-based payments hinge on meeting specific connection growth targets over the coming years.
The arrangement gives AGL Energy a meaningful equity stake in Aussie Broadband while keeping the telco’s balance sheet intact. No cash will change hands, preserving both companies’ financial flexibility.
The acquisition is expected to close in June 2026, with customer migration wrapping up by the first half of the 2027 financial year.
What’s Being Acquired?
At 31 December 2025, AGL Telco’s customer base included:
- 218,000 NBN broadband services
- 144,000 mobile connections
- 46,000 voice services
Once migration completes, Aussie Broadband expects to add approximately 350,000 combined broadband and mobile connections to its network.
The deal follows Aussie Broadband’s earlier arrangement with Tangerine and More, which will see another 290,000 NBN connections migrate to its platform during the current financial year.
Combined, these transactions will push Aussie Broadband’s total broadband connections beyond 1.25 million, with mobile services approaching 400,000 across all segments.
The Long-Term Partnership Twist
This isn’t just an asset acquisition. The two companies have struck a long-term exclusive partnership that keeps the AGL Telco brand alive.
AGL Energy will continue marketing telecommunications services under the AGL brand. Aussie Broadband will provide the underlying network infrastructure, customer service, and technical support.
The partnership includes cross-promotional exclusivity arrangements. Aussie Broadband commits to promoting AGL’s energy products, while AGL reciprocates by promoting Aussie Broadband’s telco services to its customer base.
AGL Energy managing director and CEO Damien Nicks explained the rationale: “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.”
The partnership has no fixed term but includes termination rights for events like insolvency, material breach, and reputational damage. AGL also retains rights tied to repeated performance failures and certain change-of-control events.
If the collaboration ends, AGL holds the right to buy back its branded telecommunications customer contracts at commercial value.
Financial Projections Point to Strong Returns
Aussie Broadband expects the agreement to deliver approximately $235 million in revenue and $21 million in underlying EBITDA in the 12 months following customer migration, excluding one-off transaction and migration costs.
The company projects the acquisition will be earnings per share accretive in the first year after migration completes.
Over five years, Aussie Broadband targets growing AGL Telco connections (excluding voice services) to more than 500,000.
CEO Brian Maher framed the deal as transformational: “To be chosen by one of the largest and most trusted energy providers in Australia as their partner in connectivity is a further testament to the outstanding quality and reliability of our network.”
Strategic Context: AGL’s Portfolio Simplification
For AGL Energy, the transaction represents another step in its ongoing portfolio rationalisation strategy.
The energy giant reported a 42% decline in statutory net profit to $94 million for the six months to December 2025. However, the result beat market expectations and sent AGL shares up almost 7% to $6.89.
AGL recently sold its 19.9% stake in Tilt Renewables for $750 million, with finalisation expected later this year. Proceeds from asset sales are funding investments in battery storage and renewable energy infrastructure.
The company is building a battery at Tomago, with further projects in New South Wales under consideration. A joint venture to fund up to 2 gigawatts of new wind farms is also in the works.
Nicks positioned the telco divestment as operational simplification: “This move establishes a long-term partnership where Aussie Broadband will deliver telco services under the AGL brand. We’ll also have the opportunity to increase our equity interest in Aussie Broadband through incentives that reward telco growth.”
Aussie Broadband’s Growth Trajectory
The acquisition caps a remarkable growth period for Aussie Broadband, which has expanded rapidly through both organic customer wins and strategic transactions.
In August 2024, the company sold its budget brand Buddy Telco to Commonwealth Bank-backed Tangerine while simultaneously entering a six-year wholesale NBN services agreement.
The AGL deal positions Aussie Broadband alongside Australia’s two largest NBN providers, Telstra and TPG Telecom, in terms of market share.
Maher emphasised the growth outlook: “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.”
What It Means for Customers
AGL Telco customers can expect minimal disruption during the transition period. Plans, pricing, and existing offers will remain unchanged initially.
Once migration completes, services will be backed by Aussie Broadband’s network infrastructure and customer support team, which has won multiple awards for service quality including Finder’s 2025 Most Loved NBN Provider award.
Customers will retain the ability to bundle energy and telecommunications services under the AGL brand, with the added benefit of Aussie Broadband’s technical capabilities.
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Market Performance and Outlook
As of midday trading on 11 February 2026, Aussie Broadband shares were up 12.03% to $5.075, making it one of the strongest performers on the ASX.
ABB Price Chart [ASX]
The stock has now gained significantly from its 52-week low, reflecting investor confidence in the company’s growth strategy and execution capability.
Analysts view the deal favourably, noting the performance-linked share issuance structure limits dilution risk while aligning incentives between the two companies.
The acquisition adds scale without stretching Aussie Broadband’s balance sheet, positioning it to compete more effectively against larger rivals in Australia’s competitive telecommunications market.
With the NBN market maturing and mobile services becoming increasingly important, scale advantages and customer service differentiation are becoming critical competitive factors.
Aussie Broadband’s strategy of selective acquisitions combined with award-winning customer service appears to be resonating with both customers and investors alike.
The question now is whether this momentum can be sustained as the company transitions from an aggressive acquirer to an operator managing significantly increased scale and complexity.
For now, the market is giving Aussie Broadband the benefit of the doubt.
