UEM Group Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd, has proposed a merger between UEM Sunrise Bhd and Eco World Development Group Bhd.
If the merger goes through, UEM Sunrise, which is 66.1% owned by UEM, stands to become one of Malaysia’s largest property companies, UEM said in a statement.
It would also see UEM Sunrise retaining its listing in Bursa Malaysia, led by a chairman from its current board with Eco World as its subsidiary.
“An integration committee will be set up comprising representatives from both UEM Sunrise and Eco World and co-chaired by respective chairmen, to discuss integration-related matters including the composition of the boards as well as key management teams,” the statement said.
UEM said the group would remain the single largest shareholder with 43% equity, while shareholders of Eco World would hold a 24.2% equity.
The merger is also an opportunity for an existing government-linked company to be in partnership with the private sector, with a projected gross development value of RM173.2 billion and a total land bank of more than 17,000 acres locally.
UEM said the government-linked investment companies, which include UEM, would hold more than 50% of the stake.
The merged group would focus on property developments within Malaysia and planned developments on land owned by UEM Sunrise outside the country, which would allow UEM Sunrise to stay focused on local property developments.