Malaysia’s Sime Darby to buy majority stake in UMW
24 August 2023 - 16:22
by Agency Staff
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Singapore/Bengaluru — Malaysian conglomerate Sime Darby has said it is buying a majority stake in industrial group UMW Holdings for 3.57- billion ringgit ($768.90m) in a deal that could spearhead the country’s electric vehicle (EV) journey.
The 61.2% stake in UMW is being sold by the country’s top asset manager Permodalan Nasional Bhd (PNB), the biggest shareholder in both Sime Darby and UMW.
The Thursday announcement comes after it was reported that state-owned PNB was considering merging Sime Darby Motors and Perusahaan Otomobil Kedua (Perodua), a unit of UMW, to create a local car giant worth more than 10-billion ringgit.
In the first step, PNB plans to merge the two holding firms, Sime Darby and UMW, and then create the bigger automotive group.
PNB, which manages more than 300-billion ringgit of assets, owns almost 50% of Sime Darby and has a direct 10% stake in Perodua, the country’s biggest carmaker by market share. UMW owns 38% of Perodua.
“The consolidation of two leaders in the automotive industry is driven by the opportunities to strengthen our local and regional presence in the automotive sector while providing a boost to the electrification agenda,” PNB said.
Sime Darby said that it will make an offer for the remaining 38.8% stake in UMW with the aim of delisting UMW from the stock exchange once the agreement with PNB becomes unconditional.
Shares of both Sime Darby and UMW had been suspended after the midday break after the announcement.
EV race
The plan comes amid a push by the Malaysian government to develop the country’s EV sector as competition heats up in Southeast Asia to become the main player or a hub in the global production and supply chain of EVs.
Elsewhere in Southeast Asia, Vietnam has EV maker VinFast, while Indonesia has nickel producers including Merdeka Battery and Trimegah Bangun supplying the key battery metal in the global EV supply chain.
Sime Darby Motor has been pushing for the adoption of EVs in Malaysia. The Selangor-based company has plans to build EV charging stations along highways across Peninsular Malaysia and has been selling China’s BYD EVs in the country.
Perodua is also eyeing breaking into the EV market and embarked in 2022 on a study to build its first hybrid vehicle.
Other shareholders in Perodua include Daihatsu, MBM Resources and Mitsui & Co, the company’s website showed.
Shares of Sime Darby rose 0.5% before the trading halt, while UMW shares were 1.5% higher. MBM ended 10.3% higher on Thursday.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Malaysia’s Sime Darby to buy majority stake in UMW
Singapore/Bengaluru — Malaysian conglomerate Sime Darby has said it is buying a majority stake in industrial group UMW Holdings for 3.57- billion ringgit ($768.90m) in a deal that could spearhead the country’s electric vehicle (EV) journey.
The 61.2% stake in UMW is being sold by the country’s top asset manager Permodalan Nasional Bhd (PNB), the biggest shareholder in both Sime Darby and UMW.
The Thursday announcement comes after it was reported that state-owned PNB was considering merging Sime Darby Motors and Perusahaan Otomobil Kedua (Perodua), a unit of UMW, to create a local car giant worth more than 10-billion ringgit.
In the first step, PNB plans to merge the two holding firms, Sime Darby and UMW, and then create the bigger automotive group.
PNB, which manages more than 300-billion ringgit of assets, owns almost 50% of Sime Darby and has a direct 10% stake in Perodua, the country’s biggest carmaker by market share. UMW owns 38% of Perodua.
“The consolidation of two leaders in the automotive industry is driven by the opportunities to strengthen our local and regional presence in the automotive sector while providing a boost to the electrification agenda,” PNB said.
Sime Darby said that it will make an offer for the remaining 38.8% stake in UMW with the aim of delisting UMW from the stock exchange once the agreement with PNB becomes unconditional.
Shares of both Sime Darby and UMW had been suspended after the midday break after the announcement.
EV race
The plan comes amid a push by the Malaysian government to develop the country’s EV sector as competition heats up in Southeast Asia to become the main player or a hub in the global production and supply chain of EVs.
Elsewhere in Southeast Asia, Vietnam has EV maker VinFast, while Indonesia has nickel producers including Merdeka Battery and Trimegah Bangun supplying the key battery metal in the global EV supply chain.
Sime Darby Motor has been pushing for the adoption of EVs in Malaysia. The Selangor-based company has plans to build EV charging stations along highways across Peninsular Malaysia and has been selling China’s BYD EVs in the country.
Perodua is also eyeing breaking into the EV market and embarked in 2022 on a study to build its first hybrid vehicle.
Other shareholders in Perodua include Daihatsu, MBM Resources and Mitsui & Co, the company’s website showed.
Shares of Sime Darby rose 0.5% before the trading halt, while UMW shares were 1.5% higher. MBM ended 10.3% higher on Thursday.
Reuters
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