Sime Darby has entered into a conditional share agreement to buy 61.2pc of fellow Malaysian conglomerate UMW held by state-owned fund management firm PNB, with an intent to wholly acquire and delist it, in another effort to strengthen its position in the electric vehicle (EV) sector.
"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 on 24 August. Malaysia is the third-largest auto market in the Asean region.
Sime Darby will purchase the 61.2pc stake at 5 ringgit/share ($1.07/share) totalling 3.57bn ringgit. Once the agreement becomes unconditional, a mandatory takeover offer will be obliged to be extended to acquire the remaining shares of UMW, which can lead to its delisting from the country's stock exchange Bursa Malaysia. Sime Darby expects the acquisition of PNB's stake to be completed within three months, subject to the necessary approvals and customary closing conditions.
Sime Darby's increased involvement in the EV sector includes a 2022 deal with Chinese EV manufacturer BYD to distribute cars in Malaysia, while it announced a partnership with EV charging provider Wallbox. The firm in 2021 agreed to work with Malaysian state-owned utility TNB to accelerate adoption of EVs and support the country's low-carbon mobility ambitions.
Malaysia, under its Low Carbon Mobility Blueprint 2021-30 is aiming to have EVs make up at least 15pc and 38pc of total industry volumes by 2030 and 2040 respectively.
The merger is also "in alignment" with Malaysia's New Industrial Master Plan 2030, said PNB. The industrial master plan is expected to be launched by Malaysian prime minister Anwar Ibrahim at the end of August and will be the main reference document for the planning of Malaysia's industrial development, said the Malaysian Investment Development Authority.
