Malaysian investor acquires Hume Industries
By Helen Wright18 November 2010
Malaysian investment group Hong Leong has bought local concrete producer Hume Industries for MYR 235 million (Malaysian Ringgits), or US$ 75 million.
The acquisition is part of Hong Leong's plans to expand its building materials business. The multifaceted deal will also see the investor buy up to MYR 175 million (US$ 56 million) worth of preference shares in Hume Industries' sister company, Hume Cement.
The transaction marks a change in strategy for Hong Leong, which also signalled a step away from the semiconductor business with the simultaneous announcement that it will distribute a 60.2 % stake in Malaysian Pacific Industries to shareholders.
Hong Leong is positioning itself to take advantage of new public projects in the country.
The Malaysian government is currently rolling out a number of large infrastructure initiatives under its MYR 1.3 trillion (US$ 616 billion) Economic Transformation Programme (ETP).
Malaysia's construction sector is expected to expand by +4.4% in 2011 with growth supported by ongoing projects including a new terminal at Kuala Lumpur International Airport and the construction of the second Penang Bridge linking mainland Batu Kawan and Batu Maung on Penang Island.
"Hume Industries is expected to benefit from the projects announced under the ETP, especially those requiring reinforced concrete products," Hong Leon said in a statement, describing the deal as "in line with our intention to streamline operations".