COMPANY TO WATCH: SYNERGY DRIVE/MALAYSIA
Sime Darby, the Malaysian conglomerate founded in 1910 by William Sime of Scotland and Henry Darby of England to manage rubber estates, is being merged with two other Malaysian plantation operators, Kumpulan Guthrie and Golden Hope Plantations, to form the world’s largest listed palm oil producer.
Synergy Drive, a company set up by CIMB Investment Bank to carry out the merger, was created at the urging of the Malaysian government to create a bigger and more competitive producer of palm oil for the country’s fast-growing biofuels industry. The merged entity plans to list on Bursa Malaysia later this year with a market capitalization of about $7.25 billion and 100,000 employees.
Malaysia and Indonesia, which together account for 85% of the world’s palm oil production, are seeking to create an OPEC-style cartel to regulate global prices, fight for lower tariffs in developed countries and promote palm oil as a feedstock.
The three companies to be merged have operations in energy and utilities, property, plantations, automotive, heavy equipment and other non-core businesses. Some divisions unrelated to palm oil may be sold. Dato’ Ahmad Zubir Murshid, CEO of Sime Darby, has been named CEO-designate of Synergy Drive.