KUALA LUMPUR: A potential blockbuster merger between Sunway Bhd and IJM Corporation Bhd could reshape Malaysia’s engineering and construction industry, creating one of the country’s largest and most diversified infrastructure powerhouses.
According to a report by Scoop, the two corporate heavyweights have been in confidential discussions for more than a year, exploring a share swap arrangement in a deal said to be worth billions of ringgit.
The valuation is expected to factor in both companies’ extensive asset bases, market capitalisation, and future growth potential.
If successful, the merger would combine Sunway’s strengths in property development, construction, education, and healthcare with IJM’s deep expertise in civil engineering, infrastructure, industrial construction, and plantations.
Analysts believe the merged entity could emerge as a regional construction and infrastructure leader, with enhanced financial muscle and operational scale to bid for mega projects in Malaysia and across Southeast Asia.
“This merger could signal the start of a new era for Malaysia’s construction sector,” said the analysts. “It would create a company with unmatched technical capability, capital strength, and project pipeline diversification, positioning it as a regional contender in both public and private infrastructure developments.”
However, the deal’s complexity extends beyond financial and operational integration. A key challenge lies in navigating institutional shareholder dynamics, as more than half of IJM’s shares are owned by Bumiputera-linked institutions and government investment entities. These include the Employees Provident Fund (EPF) with 18.04 per cent, Permodalan Nasional Bhd (PNB) with 14.55 per cent, Kumpulan Wang Persaraan (KWAP), Lembaga Tabung Haji, Amanah Raya, and Amanah Saham Bumiputera (ASB).
Given the strategic importance of IJM as a major player in Malaysia’s infrastructure development, government-linked investors are expected to take a cautious approach, ensuring the merger aligns with national economic objectives.
Should the merger come to fruition, the analysts said it would be one of Malaysia’s largest corporate consolidations in recent years, potentially catalysing a sector-wide re-rating in both the construction and property sectors.
It may also serve as a catalyst for renewed investor confidence, especially amid government ambitions to accelerate infrastructure expansion under the 13th Malaysia Plan (13MP) and future green and smart city initiatives.
“This deal, if successful, wouldn’t just be about synergy. It would be about scale, strategy, and Malaysia’s push to become a regional infrastructure powerhouse,” said a market analyst who spoke on condition of anonymity.
Prime Minister Datuk Seri Anwar Ibrahim has previously emphasised that PNB and other GLICs must prioritise national and Bumiputera interests in all investment decisions, particularly when it involves strategic assets or sectors vital to the country’s long-term economic resilience. He has also stressed that any corporate move should safeguard unit holders’ welfare and support Malaysia’s broader developmental agenda.
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