Malaysian conglomerate Sime Darby Berhard received shareholder approval yesterday for its proposal to acquire majority ownership of another Malaysian conglomerate, UMW Holdings Bhd, whose operations include lubricant blending plants in Malaysia and China.
The transaction amounts to a consolidation of Permodalan Nasional Berhad as the fund manager is the largest stakeholder in Sime Darby and UMW. The acquisition approved by shareholders Thursday was the purchase of PNB’s 61.2% stake in UMW. Sime Darby is paying 3.57 billion ringgit (U.S. $763 million).
Sime Darby said it expects that purchase to close by the end of this month. Sime Darby will also move forward with a bid to acquire all other shares of UMW, intending to delist the latter company from the Bursa Malaysia stock exchange during the first quarter of next year.
The merger plan, first announced in August, is driven by advantages that the companies see for operations in the automobile industry.
UMW is a manufacturer, marketer and distributor of lubricants. Subsidiary UMW Grantt Sdn. operates a wholly owned blending plant in Pulau Indah, Malaysia, producing products sold under its own Grantt brand and contract blending lubes for other marketers. It also offers lubricants under Shell’s Pennzoil brand.
UMW is also a joint venture partner with Dah Chong Hong Holdings, of Hong Kong, in Shunchang Lubricants, which operates a blending plant in Jiangmen, China.
Sime Darby Berhard was formerly one of the world’s largest owner of oil palm plantations and one of the world’s largest producers of palm oil, but it spun that business off as Sime Darby Plantation in 2017.