Published on August 24th, 2023 | by Subhash Nair0
Sime Darby Acquiring UMW, Adding Perodua & Toyota To Auto Portfolio
Sime Darby will buy over UMW and with it, UMW’s majority stake in Perodua and Toyota.
Sime Darby Berhad, already one of the largest players in the Malaysian automotive industry, today announced a deal that would further cement its position. The publicly-traded government-linked company will be purchasing UMW and delisting from Bursa Malaysia. UMW is a majority stakeholder of Perodua and Toyota.
With the addition of Perodua, Toyota and Lexus to their portfolio, Sime Darby will be the largest single automotive player in the country. They currently have BYD, Hyundai, Ford, Jaguar Land Rover, Porsche and are major dealer partners of Volvo Cars, BMW and MINI. Perodua and Toyota are currently the top performing national and non-national car brands, respectively.
Mechanism Of UMW Acquisition
Sime Darby has entered into a conditional sale and purchase agreement with Permodalan Nasional Berhad to acquire its 61.2% stake in UMW Holdings Berhad for RM3.57 billion in cash (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. The acquisition of UMW is expected to be completed within 3 months from the sale and purchase agreement subject to regulatory and shareholder approval.
Why Are Sime Darby Buying UMW?
Dato’ Jeffri Salim Davidsom, Sime Darby Berhad’s CEO explains the reasoning:
“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. 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 expected to increase Sime Darby’s earnings per share and will enhance Sime Darby’s shareholders return.