The Aussie Broadband Ltd (ASX: ABB) share price is rocketing on Wednesday after the company announced a transformational telco deal.
In late morning trade, the Aussie Broadband share price is up 13.25% to $5.13, making it one of the strongest performers on the ASX today.
Here is what investors need to know.
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What was announced today
According to the release, Aussie Broadband has signed an agreement to acquire the AGL Energy Limited (ASX: AGL) Telco business. The transaction includes AGL's broadband, mobile, and voice customer base, along with supporting systems and assets.
At completion, the deal is expected to add approximately 350,000 broadband and mobile connections to Aussie Broadband, along with approximately 46,000 voice services. The acquisition is expected to be completed in June 2026, with customer migration to follow during the first half of FY27.
As part of the arrangement, the 2 companies have also agreed to an exclusive long-term partnership. Under this structure, AGL will continue to market telecommunications services under the AGL brand, while Aussie Broadband will provide the network, services, and customer experience.
How the deal is being paid for
AGL will receive $115 million worth of Aussie Broadband shares on completion, based on the volume-weighted average price (VWAP) prior to the announcement.
A further up to $10 million in shares may be issued over time, subject to meeting agreed connection growth targets. These additional shares would be issued in tranches and are linked to performance outcomes.
Aussie Broadband said the acquisition is expected to be earnings per share (EPS) accretive in the first year after migration of customers.
Expected financial contribution
In the first full year after customer migration, the agreement is expected to deliver around $235 million in revenue and around $21 million in underlying EBITDA.
Over time, Aussie Broadband expects the number of AGL Telco connections, excluding voice services, to grow to more than 500,000 over 5 years. Management believes the transaction will strengthen its position as one of Australia's largest NBN service providers.
About the business
Aussie Broadband provides broadband, mobile, and voice services to residential, business, and wholesale customers across Australia. The company is known for its Australian-based customer support and focus on service quality.
Following this transaction, Aussie Broadband expects to service close to 400,000 mobile connections across its segments once migration is complete.
What investors are watching next
Aussie Broadband is due to report its half-year results on Monday, 23 February 2026.
The update will be closely watched for earnings performance, guidance, and further details on integration plans.
