Sunway Berhad’s proposed $2.7 billion acquisition of IJM Corporation Berhad has triggered regulatory and political debate in Malaysia, with officials questioning whether the deal complies with Bumiputera equity ownership requirements. The transaction, if approved, would reshape Malaysia’s construction and property sectors.
- Sunway Berhad’s RM11.9 billion ($2.7 billion) bid for IJM Corporation Berhad is under regulatory review.
- Sunway’s current Bumiputera ownership is 28%, below the 30% threshold required in key sectors.
- Regulators are assessing whether the merger would reduce Bumiputera equity participation.
- Stocks of SUNWAY.MY and IJM.MY declined on uncertainty, reflecting market caution.
- The outcome may influence future M&A activity across Malaysia’s construction and real estate sectors.
- The Kuala Lumpur Stock Exchange (KLSE.MY) showed modest volatility due to regulatory risk.
Sunway Berhad has formally offered RM11.9 billion ($2.7 billion) to acquire IJM Corporation Berhad, a key player in Malaysia’s infrastructure and property development landscape. The proposed merger, which would create one of the country’s largest real estate and construction conglomerates, is under review by regulatory authorities amid concerns about compliance with national Bumiputera equity mandates. Under Malaysia’s affirmative action framework, companies in strategic sectors must maintain a minimum Bumiputera ownership stake of 30%, with higher thresholds in certain industries. The scrutiny centers on Sunway’s current Bumiputera ownership structure, which stands at approximately 28%, falling short of the required threshold for full compliance in the construction and property sectors. Regulators are evaluating whether the proposed transaction would result in a net reduction in Bumiputera equity holdings, potentially violating long-standing policies designed to promote ethnic economic inclusion. The outcome could determine whether the deal proceeds, is modified, or is rejected. The market has reacted cautiously. Sunway’s shares (SUNWAY.MY) dipped 3.2% in early trading, while IJM (IJM.MY) saw a 1.8% decline on uncertainty around deal certainty. The Kuala Lumpur Stock Exchange (KLSE.MY) index exhibited minor volatility, reflecting investor concerns over regulatory delays and potential policy shifts in major sector consolidations. Analysts note that the deal’s fate could set a precedent for future cross-sector mergers involving foreign or non-Bumiputera-controlled entities.