Malaysia's UEM Sunrise's major shareholder proposes merger for it and Eco World

KUALA LUMPUR:UEM Sunrise Bhd, one of the largest property developers in Malaysia, has received a letter from its shareholder proposing a merger with peer Eco World Development Group Bhd, the company said on Monday.

Its major shareholder UEM Group, in a letter on Friday asked for UEM Sunrise and Eco World to "consider the merits of a proposed merger and to commence discussions".

"Given subdued macro-economic conditions and market headwinds, we believe that there is a pressing need for industry players to consolidate resources and capabilities to strengthen performance and sustainability," the letter said.

UEM Group is wholly-owned by Malaysian sovereign wealth fund Khazanah Nasional, which Refinitiv data shows owns 66.06% in UEM Sunrise.

Eco World also said in an exchange filing that it received a letter from UEM Group proposing the merger with UEM Sunrise. UEM Group does not own any stake in the company.

UEM Sunrise shares rose 12.5% in early trade, while Eco World shares surged 10.13%.

The proposed merger would be carried out via an exchange of shares and warrants in Eco World for new shares and warrants in UEM Sunrise.

If completed, Eco World would become a wholly-owned subsidiary of UEM Sunrise and will be delisted.