KUALA LUMPUR, Malaysia (July 8): Analysts believe Sime Darby Bhd’s acquisition of Salmon Earthmoving Holdings Pty Ltd (Salmon Australia), an Australian provider of rental and maintenance services to the civil construction, agriculture, and mining industries, will boost the group’s market position in Australia. Sime Darby announced the acquisition of Salmon Australia for A$104 million (RM327 million) yesterday in order to expand its rental operations and diversify into the civil construction industry. By August, the acquisition process should be completed.
“Sime Darby will be able to expand its market into the civil construction industry (currently, Sime Darby is mostly focused on the mining sector) as well as into the New South Wales region as a result of the acquisition (currently Sime Darby focuses more on the Queensland region). Sime Darby will continue to hunt for further pockets of acquisitions in current geographical regions to complement and expand its core segments, such as industrial and motor industry “In a note to investors today, HLIB Research stated.
Nonetheless, the contribution will be insignificant in comparison to the present group’s huge earnings base of RM1.1 billion to RM1.2 billion, according to the research firm.
Sime Darby will be able to benefit from the Australian government’s 10-year A$15.2 billion infrastructure project launched recently as part of its stimulus plan to sustain employment in the post-pandemic economy, according to PublicInvest Research.
The local research firm stated, “We are optimistic on the acquisition because it complements its current Australia operations and offers diversification to other original equipment manufacturer brands such as Hitachi, Komatsu, Mack, and Isuzu equipment.”
At 10 a.m., Sime Darby shares were trading at RM2.16, down three sen or 1.37 percent, for a market capitalization of RM14.76 billion./n
