Hap Seng to buy Mercedes’ commercial vehicle business

This article first appeared in The Edge Financial Daily, on April 26, 2018.
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KUALA LUMPUR: Hap Seng Consolidated Bhd is acquiring from Mercedes-Benz Malaysia Sdn Bhd (MBM) its commercial vehicle general distributorship business, making Hap Seng the sole general distributor of Mercedes-Benz and Fuso commercial vehicles in Malaysia.

Hap Seng said it and MBM will jointly undertake a stock take in respect of the fixed and current assets to determine the final purchase consideration.

The group opines that the proposed acquisition will enable it to participate in the wholesale distribution of Mercedes-Benz and Fuso commercial vehicles in a growing domestic market.

“[This] will further strengthen our presence as a significant Mercedes-Benz automotive player for passenger and commercial vehicles in Malaysia,” Hap Seng said in a filing with Bursa Malaysia yesterday.

Hap Seng’s wholly-owned subsidiary Hap Seng Trucks Distribution Sdn Bhd yesterday entered into an agreement with MBM for the proposed business transfer.

On completion, Hap Seng Trucks will be responsible for handling the import, assembly, wholesale distribution and after-sales services of Mercedes-Benz and Fuso commercial vehicles in Malaysia.

However, the business transfer is conditional upon Hap Seng obtaining the licence to import complete knocked down components from the international trade and industry ministry, which is required to carry on the business.

The business transfer is also conditional upon the novation of the purchased contracts or execution of fresh contracts with Hap Seng concerning the existing contract between MBM and Nusa Automobil Corp Sdn Bhd or any other importer for completely built-up (including V-class) vehicles, as well as the manufacturing contract between MBM and Hicom Automotive Manufacturers (M) Sdn Bhd.

Hap Seng said the proposed acquisition will be funded through internal funds and/or external borrowings. “Barring any unforeseen circumstances and subject to the fulfilment of the conditions, the proposed acquisition is expected to be completed within nine months,” it added.

In a separate statement yesterday, Hap Seng said Hap Seng Trucks will be helmed by Roland Schneider, a German who rose through the ranks after more than 28 years with the Daimler group. His last position was president and chief executive officer of Daimler Commercial Vehicles in Dubai.

Hap Seng shares closed up one sen or 0.1% at RM9.71 yesterday, with a market capitalisation of RM24.2 billion.