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In this eight-part series, KiniBiz revisits Sime Darby Berhad nearly eight years after its 2006 merger and found that it has actually lost value since the exercise. The group’s senior management is already considering corporate spin-offs for some time so KiniBiz then looks at how such a demerger can be done for maximum benefit, putting forward a suggested structure in the process. Then KiniBiz goes through the five core divisions — Plantation, Property, Motors, Industrial and Energy & Utilities — to examine how they have done since the 2006 merger and if they would benefit from an independent listing. Finally, KiniBiz analyses why a demerger of Sime Darby would boost its entire value by some RM20 billion — a third of its current market value.
Issues
#1
In six full financial years after the Synergy Drive merger, Sime Darby Berhad had not seen a stable growth trajectory in terms of earnings. Additionally its market value has declined. Is it time ...
#2
Sime Darby’s own management is already considering spinning off some of its divisions, it appears, though perhaps not to the extent of completely breaking up the conglomerate. But how do you ...
#3
While the plantations division has shown some improvement, it still lags behind industry leaders in terms of yield. Meantime, the overall risk profile is increased by a massive inroad into ...
#4
A mega merger of Permodalan Nasional Bhd’s property interests, which of course includes Sime Darby’s property division besides SP Setia and the I & P Group, will have interesting and intoxicating ...
#5
Sime Darby’s Motors division is the unassuming poster child of successful overseas expansion, something other government-linked companies (GLCs) should be envious of. As a division it has ...
#6
Overall, Sime Darby Industrial has outperformed the group since the Synergy Drive merger. But its business is cyclical and more volatile than most other divisions. KiniBiz looks at why it needs ...
#7
Sime Darby Energy & Utilities is much smaller from other, bigger divisions in terms of contributions. But its RM2 billion loss in FY10 is a lesson in how big an effect one division’s performance ...
#8
The disadvantages of Sime Darby’s current conglomerate structure outweigh the benefits — if any. Breaking it up, even if it is hard to do, is a much better path forward for the group, especially ...
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