Malaysian merger to create world’s largest palm oil firm

KUALA LUMPUR, Nov 27, 2006 (AFP) – Three Malaysian plantation firms will merge to create the world’s largest listed palm oil business, worth 31.4 billion ringgit (8.6 billion dollars), under an ambitious plan announced Monday. A new vehicle, Synergy Drive, will buy the assets and liabilities of Sime Darby Bhd, Golden Hope Plantations Bhd and Kumpulan Guthrie Bhd, Malaysia’s top investment bank CIMB said.

Analysts said the merger, part of a campaign to develop Malaysia’s agriculture sector, will boost the country’s status as a top palm oil producer amid growing regional competition.

“We see value in the creation of a global leader in oil palm plantations, with a potential total annual revenue of over 26 billion (ringgit), a combined workforce of over 107,000 and total plantation land of approximately 600,000 hectares located in Malaysia and Indonesia,” said Nazir Razak, chief executive officer of CIMB Group.

CIMB is tabling the merger proposal with the target companies and will provide seed financing for the deal.

Nazir said that based on the merger exchange price of 5.25 ringgit per share, the new concern would have a market capitalisation of 31.4 billion ringgit, making it the fifth-largest company on the Malay