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Malaysia’s largest asset manager, Permodalan Nasional Bhd (PNB), is considering merging Sime Darby Motors and Perusahaan Otomobil Kedua (Perodua) to create a local automotive giant worth over 10 billion ringgit ($2.15 billion), two sources said.

State-owned PNB is talking to advisers to explore options including first by merging the holding companies of the two units then creating the bigger automotive group that could help spearhead the development of the electric vehicle (EV) sector in Malaysia, the sources with knowledge of the matter said.

The plan comes amid a push by the Malaysian government to develop the country’s EV sector as competition heats up in Southeast Asia to become the main player or a hub in the global production and supply chain of EVs.

PNB, which manages over 300 billion ringgit of assets, could drive such a deal as it is the biggest shareholder in Sime Darby Motors’ parent, Sime Darby, owning almost a 50% stake and is also the largest shareholder in Perodua’s top stakeholder and owns a direct 10% stake in Perodua.

PNB holds 60.6% of industrial group UMW Holdings, which in turn owns 38% of Perodua, the country’s biggest automaker by market share.

Other shareholders in Perodua include Daihatsu, MBM Resources and Mitsui & Co, Perodua’s website showed.

The sources declined to be named as the matter is private.

PNB, Sime Darby, UMW and Perodua declined to comment.

Elsewhere in Southeast Asia, Vietnam has EV maker VinFast, while Indonesia has nickel producers including Merdeka Battery and Trimegah Bangun supplying the key battery metal in the global EV supply chain.

Sime Darby Motor has been pushing for the adoption of EVs in Malaysia. The Selangor-based company has plans to build EV charging stations along highways across Peninsular Malaysia and has been selling China’s BYD EVs in the country.

Perodua is also eyeing breaking into the EV market and embarked last year on a study to build its first hybrid vehicle.

Reuters

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