An eventful year for Malaysian corporate scene in 2017

KUALA LUMPUR: It has been an eventful year for corporate development in 2017 with major movers and shakers in the motor vehicle, energy, plantation, aviation and banking industries jolting the local scene.

During the year, companies consolidated their positions and embarked on deals to strengthen their financials and gain further market shares as well as competitiveness.

Malaysia witnessed merger & acquisition (M&A) deals valued at US$17.6 billion (US$1 = RM4.07) in 2017, the highest in the past five years, according to Duff & Phelps Transaction Trail 2017.

The report by the global valuation and corporate finance advisor looked at M&As, private equity and venture capital deals and initial public offerings in Singapore, Malaysia and Indonesia.

The energy sector continued to witness high deal value activities for inbound M&As and real estate being the top sector for domestic M&As.

The two largest M&A transactions in 2017 were the acquisitions of 50 per cent stakes in Refinery and Petrochemical Integrated Development and PRPC Polymers Sdn Bhd, both by Saudi Arabian Oil Co.

In the property sector, SP Setia Bhd’s buy of I&P Group Sdn Bhd for RM3.65 billion to boost its landbank paved the way for the merger of the property groups and set the pace in M&A deals this year.

The motor vehicle industry has generated a lot of euphoria with the landmark deal of the year after China-based Zhejiang Geely Holding Group Co Ltd (Geely) acquired a 49.9 per cent stake in national carmaker, Proton Holdings Bhd.

The objective was for Proton to regain its glory in pole position in Malaysia’s motor vehicle market as well as making inroads into overseas markets through the injection of new management and expertise from Geely.

It was believed that Geely, which also owns Swedish Volvo car company, could turn Proton around.

However, this could not happen overnight as Proton would likely remain lossmaking until it can introduce new models to boost sales volume.

It is expected that the launch of the right-hand drive Boyuebased sports utility vehicle next year, would consolidate Proton’s position and provide the impetus to grow.

Meanwhile, for national carrier Malaysia Airlines, it is focusing on its turnaround plan to turn the airline to the path of profitability after the sudden departure of its Chief Executive officer (CEO), Peter Bellew.