Sime Darby acquires Australia’s luxury car dealership for RM321m

The acquisition will enhance its presence and visibility in Parramatta, Sydney

by SULHI KHALID

SIME Darby Bhd has acquired the business assets and properties of Australia’s three luxury cars dealership — representing the BMW, MINI, Volkswagen, Jaguar and Land Rover marques for — A$112 million (RM321 million).

The group told Bursa Malaysia yesterday the acquisition will enhance its presence and visibility in one of Australia’s most recognised automotive retail locations, Parramatta in Sydney.

“The proposed investment is aligned to Sime Darby Motor Sdn Bhd’s strategy to expand via mergers and acquisitions, targeting the retail luxury and super luxury segments, particularly in large markets like Australia.

“This acquisition shows the group’s long-term commitment to investment in Australia,” Sime Darby Motors Australia and New Zealand MD Patrick McKenna stated.

The acquisition will be funded by bank borrowings and is subject to the approval of the Foreign Investment Review Board of Australia.

“The consideration was negotiated based on the agreed fair value of the purchased net assets and will be funded by external borrowings. The purchased net assets include all properties, business assets and liabilities that are necessary to operate the car dealerships,” Sime Darby noted.

The deal is expected to be completed in early December this year.

In July, Sime Darby acquired New Zealand’s Gough Group Ltd for NZ$211 million (RM572 million), the largest deal since the group’s restructuring exercise in 2017.

Gough Group has the Caterpillar dealership in New Zealand and interests in the transport and materials handling business in New Zealand and Australia.

Sime Darby Group CEO Datuk Jeffri Salim Davidson (picture) in a statement said the corporate exercise allows the conglomerate to enhance its relationship with Caterpillar and gain exposure to the construction and forestry sectors in New Zealand, further reinforcing Sime Darby Industrial’s footprint in the Asia-Pacific region.

The deal is expected to be completed by the end of September and it will be fully funded by bank borrowings, on a cash-free and debt-free basis.

Sime Darby made a net profit of RM948 million and revenue of RM36 billion for the financial year 2019 (FY19).

The group attributed the profit to the strong performance of its Industrial Division on the back of a recovery in the mining and construction sectors in Australia and construction activities in China.

Sime Darby’s shares closed two sen lower yesterday to RM2.32, valuing it at RM15.78 billion.