KUALA LUMPUR: Sime Darby Bhd has entered into a conditional share purchase agreement with Permodalan Nasional Bhd (PNB) to acquire PNB’s 61.2% stake in UMW Holdings Bhd, a well-established conglomerate with a diverse portfolio of businesses including automotive, equipment, aerospace and manufacturing and engineering segments.
Sime Darby will purchase the stake for a cash consideration of RM3.57 billion or RM5 per share. Once the agreement becomes unconditional, Sime Darby will make a general offer for the remaining 38.8% stake that it does not hold with the aim of delisting UMW from Bursa Malaysia Securities.
“This is a strategic move to further scale up and strengthen our presence in the Malaysian automotive sector, adding two highly performing brands into our Malaysian portfolio – Toyota and Perodua. The deal will cement Sime Darby’s position as Malaysia’s leading automotive player,” said Sime Darby group CEO Datuk Jeffri Salim Davidson
“As a partner of choice to some of the most-admired brands in the automotive sector, we are very excited to have the opportunity to work with Toyota, one of the world’s largest and most respected automakers.”
The acquisition is accretive to Sime Darby’s earnings per share and will enhance shareholders’ return.
During a media briefing on Sime Darby’s fourth quarter results for financial year 2023, Jeffri Salim said, “We are sort of overseas focused ... it’s something like 40% Australia, 35% China, so 75% there and only 15% Malaysia. It’s out of balance ... with this transaction, it gets a bit more in sync. So after we’ve completed this (transaction), we would roughly have one third, about 30% each in Malaysia and China and Australia. Malaysia becomes a big enough engine.”
He said a merger between the groups had been discussed “for a long time” and pointed out that both share similar businesses.
“Sime Darby and UMW are very similar (in terms of) business Where we may differ a little bit, they are more Malaysia-centric. They have quite a big business in Papua New Guinea, Myanmar but I suggest more than 90% of their business is in Malaysia. We are slightly the opposite, we are only 50% left in Malaysia because of the growth that we’ve had and investment made, in Australia it was mining and China motor cars, but (we have) very similar businesses,” he said.
Source: The Sun Daily
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