Malaysia’s largest asset manager, Permodalan Nasional Bhd (PNB), is considering merging Sime Darby Motors and Perusahaan Otomobil Kedua (Perodua) to create a domestic automotive giant worth more than 10 billion ringgit (USD 2.15 billion), two sources said.
State-owned PNB was speaking to advisers to explore options including first by merging the holding companies of the two units then creating the bigger automotive group that could help spearhead the development of the electric vehicle (EV) sector in Malaysia, the sources with knowledge of the matter said.
The sources declined to be identified as the matter is private.
Following Reuters report, conglomerate Sime Darby issued a statement saying it was acquiring a 61.2% stake in industrial group UMW Holdings from PNB for 3.57 billion ringgit (USD 769.40 million).
Sime Darby said it would 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.
“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, which is expected to drive investment growth, enhance efficiency, and create value for our unit holders,” PNB said in a statement on Thursday following Sime Darby’s announcement.
Shares of both Sime Darby and UMW had been suspended after the midday break following Reuters report and 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.
PNB, which manages over 300 billion ringgit of assets, could drive such a deal as it is the biggest shareholder in Sime Darby Motors’ parent, Sime Darby, owning almost a 50% stake and is also the largest shareholder in Perodua’s top stakeholder UMW.
PNB also owns a direct 10% stake in Perodua, the country’s biggest automaker by market share.
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 last year on a study to build its first hybrid vehicle.
Other shareholders in Perodua include Daihatsu, MBM Resources and Mitsui & Co, Perodua’s website showed.
Shares of Sime Darby rose 0.5% before the trading halt, while UMW shares were 1.5% higher. MBM surged 13%.
