Shares in Sime Darby opened about 5 per cent higher today, after it disclosed plans yesterday to buy a majority stake in local industrial group UMW Holdings for RM3.57 billion.
The 61.2 per cent stake in UMW is being sold by Permodalan Nasional Berhad (PNB), the biggest shareholder in both Sime Darby and UMW.
Shares of Sime Darby rose as much as 5.2 per cent to RM2.22 as of 9.08am. UMW shares gained about 5 per cent.
Sime Darby said in a statement late yesterday it would make an offer for the remaining 38.8 per cent stake in UMW to delist it from Bursa Malaysia once the agreement with PNB becomes unconditional.
Under the deal, PNB plans to merge Sime Darby and UMW with the aim of creating a bigger automotive firm in a deal to further strengthen respective positions in the country’s automobile industry.
UMW is the largest shareholder in Perodua and assembles Toyota Motor’s vehicles locally, Reuters reported.
Yesterday’s announcement came after Reuters first reported state-owned PNB was considering merging Sime Darby Motors and Perodua, a unit of UMW, to create a local auto giant.
“Of utmost significance, the management has indicated this acquisition is vital for enabling access to the mass market, especially considering Perodua and Toyota collectively possess about 52 per cent of the market share,” Jefferies analysts said.
