Kuala Lumpur (ANTARA News) - Three Malaysian plantation companies on Wednesday signed agreements launching a 11 billion dollar merger which will create the world`s largest listed palm oil firm, company officials said.
Synergy Drive, the merger vehicle, signed sale agreements with Sime Darby, Golden Hope Plantations and Kumpulan Guthrie Berhad, involving all their assets and liabilities.
"We are pleased with the progress that has been made, and we will commit the necessary energy and resources to ensure a smooth completion of the merger and integration of our businesses," Synergy Drive`s chief executive Ahmad Zubir Murshid said in a statement.
Synergy Drive said the deal is expected to be completed by the fourth quarter of 2007, after which it will be listed on Malaysia`s bourse.
"The companies are committed to working as one to ensure the exercise is carried out smoothly and successfully," said Kumpulan Guthrie group chief executive Abdul Wahab Maskan.
Synergy Drive will have a combined market capitalisation of 38.4 billion ringgit (10.97 billion dollars) according to current share prices, making it Malaysia`s third-largest listed firm, officials said.
Synergy Drive said last month it would enter into a conditional sale and purchase agreement with each of the firms and their units in January.
The agreements were to have been signed on January 15, but instead two of the firms said the deadline to conclude a deal was extended to January 29.
The New Straits Times reported that the delay was due to hesitation by the companies` majority stakeholder, government investment vehicle Permodalan Nasional Berhad (PNB).
However, the government has firmly backed the merger, and the newspaper said PNB returned to the negotiating table after a high-level meeting at which it was told the government wanted the deal concluded.
"The authorities told them in no uncertain terms that this merger was good for the companies, the market and the country," an unnamed source was quoted as saying Wednesday in the daily.
PNB will control the firm, which will have total annual revenue of over 26 billion ringgit, a workforce of some 107,000 and combined plantation land of some 600,000 hectares in Malaysia and Indonesia.
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