Sime Darby has just announced that they are proposing to acquire UMW Group in a conditional share purchase agreement between the two companies. With the acquisition, Sime Darby will be getting approximately 61.18% of equity interest in UMW.
The announcement was made today to Bursa Malaysia, which was followed by a suspension of trading of the shares for both companies in a filing made to Bursa.
Earlier today, Reuters reported that Permodalan Nasional Bhd (PNB) was considering the merger of Sime Darby’s auto business, Sime Darby Motors and Perodua. The acquisition is to create a new automotive group that has a potential worth more than RM 10 billion.
PNB, the largest shareholder in Sime Darby, already has a 10% direct stake in Perodua, whose other shareholders include Daihatsu, MBM Resources and Mitsui & Co.
On why Sime Darby is pursuing the acquisition, the brand mentioned that it is to scale up and strengthen group’s motors business, positioning Sime Darby as a leading automotive player with more than 50% market share in Malaysia, as well as enhancing sustainable returns by entering into new brand ecosystem with Toyota and Perodua, among others.
Sime Darby is set to be the biggest automotive player in the market with the acquisition, as the brand will have more than 50% of the market share with brands such as Toyota, Lexus, Perodua, Hyundai and BYD under their belt moving forward.
The group will also see more manufacturing capabilities accessible to them along with a bigger retail business across Malaysia with the acquisition via sales & service centres, as well as bringing in TICO, a leading player in the forklifts market, into Sime Darby’s industrial segment portfolio.
“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 Dato’ Jeffri Salim Davidson, Sime Darby Berhad’s Group Chief Executive Officer. “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.”
Sime Darby expects the acquisition to be completed within 3 months from the date of SPA, subject to regulatory and shareholders’ approvals and customary closing
conditions.
[SOURCE]
