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Sime Darby

 Sime Darby Essay

Intro

This article covers Sime Darby Berhad (SD), the largest international company in Malaysia, which has recently bought 30% of Eastern & Oriental Berhad (E& O)'s shares coming from 3 of its key stakeholders – E& Um Managing Director and starting member Datuk Tham Ka Hon, Tan Sri Wan Azmi Wan Hamzah, and GK Goh Holdings Limited (Singapore). In our critique, all of us will go over the factors influencing SD's decision, the impact of this acquisition on inventory prices of both businesses, and how the industry would respond if SD was obliged to make a Mandatory General Give (MGO) to buy out every E& Um shares.

M& A -- Diversification

SD is a leading multinational conglomerate in Malaysia, with a fortune of USD16. 34 billion. It has six divisions, while using property division's revenue contribution at a distant last behind the Motor, Plantation, and Industrial divisions'.

Despite 40 years of knowledge in producing property, most of SD Property's prime property bank nonetheless remains undeveloped. SD has chosen to diversify and enhance its home division simply by acquiring experience in various specific niche market markets; dealing with and getting an understanding of functions of well-known players in these fields. Being a diversified expenditure portfolio, fortifying and diversifying each section allows SECURE DIGITAL to better hedge against monetary downturns, as property markets respond in another way to financial shocks compared to SD's various other core categories.

M& A – Synergy

In addition to this 30% obtain, a 3-year collaboration agreement to retain the existing MD Datuk Tham Ka Hon and his management crew was agreed upon, retaining experience of their current management in addition to having access to coveted land in Penang (a 100% purchase would likely result in loss of human expertise through hostile takeover).

With this buy, SD can easily leverage within the talent, logos and connection with E& U as a specialized niche property designer. SD has made plans to send some of their property department staff to...

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