KUALA LUMPUR, August 24 — In a significant move, Sime Darby Bhd has announced its plan to acquire a substantial 61.2 per cent stake in UMW Holdings Bhd from Permodalan Nasional Bhd (PNB), marking a strategic step towards enhancing its influence within the Malaysian automotive sector. The acquisition, valued at RM3.57 billion in cash, signifies a deliberate effort to fortify its market presence and expand operations.
Regarded as one of the most substantial merger and acquisition transactions in Malaysia, this move is poised to redefine Sime Darby’s role in the national automotive landscape. By incorporating high-volume mass-market brands, namely Toyota and Perodua, the company anticipates securing a commanding share of up to 60 per cent of the domestic automotive total industry volume.
Datuk Jeffri Salim Davidson, Group Chief Executive Officer, expressed his enthusiasm for the acquisition, emphasizing how it synergizes with Sime Darby’s existing premium-to-luxury portfolio, which features renowned names such as BMW, Rolls-Royce, and Porsche. Beyond the immediate benefits, this strategic move enables the company to bolster its operations within Malaysia, while also mitigating potential geopolitical risks stemming from its prominent markets in China and Australia.
Post-acquisition, a transformative shift is expected in terms of revenue distribution across regions. The new configuration is projected to balance contributions, with an approximate distribution of 30 per cent from each region (Malaysia, China, Australia), compared to the current allocation of 15:37:35. This adjustment is set to provide a more stable and diversified revenue profile for the company.
Commenting on the transaction, Jeffri noted that UMW’s standing as a dominant player within the local automotive sector, with a 52 per cent market share, is set to witness further enhancement, potentially rising to 55 per cent.
Beyond financial implications, the expanded entity resulting from this acquisition is poised to create enhanced value for stakeholders across the board. Jeffri emphasized the pivotal role this move would play in facilitating the growth of Malaysia’s national automotive industry, underscoring Sime Darby’s commitment as a Malaysian multinational company.
The timeline for this transformative deal involves a conditional share purchase agreement (SPA) with PNB, with the subsequent pursuit of shareholders’ consent through an extraordinary general meeting scheduled for November. With the transaction valued at RM3.57 billion, calculated based on a RM5 per share under the SPA terms, the company anticipates the move to be earnings accretive. The benefits are poised to extend to Sime Darby shareholders, as well as PNB unit holders in the long run.