Why Sime-UMW merger of auto ops is not feasible

Lower sales: A UMW Toyota signage is seen in Rawang.la The automotive revenue dropped 20.3%, dragging down UMW

PETALING JAYA: The proposal to merge the automotive businesses of Sime Darby Bhd and UMW Holdings Bhd may not be feasible because of differences and difficulties in getting the various principals of car manufacturers, according to sources.

“The two operate in different segments and their principals have different views, going forward. A merger is not the best option to create value for the major shareholder due to the lack of synergistic opportunities. The focus now is more on creating efficiency and reducing complications, not the other way around,” said a source familiar with the matter.