Malaysias PPB Oil says government wont block merger deal with Singapore refiner
Plantation firm PPB Oil Palms Bhd. said Thursday it is confident Malaysian regulators won’t block its US$4.3 billion (euro3.6 billion) merger with Singapore palm oil refiner Wilmar International Ltd.
“I don’t think the government will stop (the deal) but they might impose conditions,” Oh Siew Nam, executive chairman of PPB Group Bhd. which is the parent of PPB Oil Palms, told reporters.
He said Malaysia’s foreign investment committee has already approved the deal but imposed several conditions for it to succeed. He didn’t elaborate on what the conditions are.
Approvals from the Securities Commission, trade ministry and the central bank are pending, he added.
In December, the companies linked to Malaysian billionaire Robert Kuok announced a complex merger of Wilmar – controlled by Kuok’s nephew Kuok Khoon Hong – and Kuala Lumpur-listed PPB Oil Palms as well as two unlisted companies.
The deal will combine PPB Oil’s large plantations with Wilmar’s string of refiners and biodiesel plants across Indonesia, Malaysia and Singapore, creating a massive integrated palm oil company.
The move is similar to a recent proposed merger of three Malaysian palm oil producers that will potentially create the world’s biggest biofuels company.
Oh said shareholders of PPB Oil Palms – which controls the plantation assets of Kuok’s PBB Group – are expected to vote on the merger in April and the exercise to be completed around May.Under the plan, PBB Oil Palms shareholders will receive 2.3 Wilmar shares valued at 9.046 ringgit (US$2.6, euro2.2) for each PPB Oil Palms share, he said.
Following the merger, PPB Group will own 18.2 percent of Wilmar, he added.
Oh downplayed concerns that biodiesel production has become nonviable due to rising palm oil prices and the fall in crude oil prices. He said growing concerns about extreme weather and its link to global warning mean countries will seek alternativerenewable energy.
PPB started biodiesel production this year in Malaysia and expects to produce 100,000 metric tons of the fuel this year, he added. AP
