Sime Darby CEO Datuk Jeffri Salim Davidson said the decision to buy out UMW Holdings Bhd will allow the group to become the leading automotive player in Malaysia and give it a full presence across the spectrum.

KUALA LUMPUR (Aug 24): Sime Darby Bhd's decision to buy out UMW Holdings Bhd will allow the group to become the leading automotive player in Malaysia and give it a full presence across the spectrum by adding high quality mass market car brands to its portfolio.

“We are largely a retailer — we are dealers for BMW and others where they do the assembly — and what this (UMW takeover) does is to plug the gap. Perodua and Toyota are large in the manufacturing and distribution business.

“So after this, we would have assembly, manufacturing, distribution, retail, and after sales. So this completes our spectrum,” said Sime Darby executive director and group chief executive officer Datuk Jeffri Salim Davidson at the media briefing in conjunction with its financial results for the fourth quarter of 2023 (4QFY2023) on Thursday (Aug 24).

Sime Darby has proposed to acquire its parent company Permodalan Nasional Bhd’s (PNB) 61.18% stake in UMW at RM5 per share or RM3.57 billion in total.

Sime Darby is also making a mandatory general offer (MGO) to buyout the remaining UMW shares and take UMW private.

It is worth noting that UMW is one of the biggest automotive and industrial groups in the country, boasting strategic partnerships with global companies such as Toyota Motor Corp and Komatsu Ltd. UMW also owns a 38% stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua).

As such, Jeffri expects the acquisition of UMW to open up more opportunities for Sime Darby’s automotive segment in Malaysia and other international markets.

“In terms of the market, they (UMW) are the second biggest car company [locally]. I mean, their products are very well accepted and reliable and strongly in demand by the public.

“So why wouldn’t we want to work with Toyota as it may open up opportunities for us,” he said.

Jeffri said that the group has yet to discuss with UMW on its future plans as it is still early days, dubbing the acquisition as an “engagement ceremony” between both parties.

“We haven’t had a chance to really do much yet or talk to them (UMW) but there will be some divestment, some rationalisation, some synergy opportunities. But we don’t really know what they are yet,” he disclosed.

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