KUALA LUMPUR (March 13): UMW Holdings Bhd said there are no plans to merge with Sime Darby Bhd’s motor division, since UMW is focusing on its exit from the oil and gas sector.

UMW said this in a statement today in response to The Edge Malaysia business and investment weekly's (Edge Weekly) report which indicated Permodalan Nasional Bhd (PNB) planned to merge Sime Darby's motor division with UMW. 

Edge Weekly quoted a source as saying: “Instead of listing Sime Darby Motors as a separate company, PNB has plans to merge the motor division with UMW Holdings. This will create a massive motor company under PNB’s roof."

PNB is the common controlling shareholder in both Sime Darby and UMW, with stakes of more than 50% each in both diversified entities. 

UMW said in the statement: "Reference is made to The Edge report titled 'Sime Darby Motors-UMW Holdings merger on the table' published in the Weekly edition 13-19 March 2017. UMW stated that the report is incorrect and there are no such plans."

"On 19 January 2017, UMW had announced its plans to exit the oil & gas sector. The exit from oil & gas is done through distribution in specie of all its shares in UMW Oil & Gas Corp Bhd to all entitled shareholders of UMW. This distribution exercise will be followed by a progressive exit of non-listed oil & gas assets held by UMW. The group is currently focusing on executing the announced initiatives as per the stated timeline," UMW said.

According to UMW's website, its businesses include automotive component manufacturing and heavy equipment distribution. UMW, which distributes Toyota cars in Malaysia, also owns 38% of Perusahaan Otomobil Kedua Sdn Bhd (Perodua). 

Sime Darby's businesses include oil palm plantation and property development. Its automotive dealerships include names like BMW, Rolls-Royce and Mitsubishi.