Palm oil seeds are processed to extract oil used in food manufacturing, pharmaceuticals and chemical … [+]
Kuala Lumpur Kepong—controlled by billionaire brothers Lee Oi Hian and Hau Hian—is expanding its palm oil business by taking over Boustead Plantations, in a deal valuing the smaller rival at 3.5 billion ringgit ($747 million).
KL Kepong said Thursday it will buy an initial 33% stake in Boustead Plantations for 1.15 billion ringgit and then purchase the rest of the company in partnership with top shareholders including Boustead Holdings and Malaysia’s military pension fund Lembaga Tabung Angkatan Tentera. The partners will pay 1.55 ringgit for each share of Boustead Plantations, a 13% premium to Wednesday’s closing price before trading was suspended.
“This strategic collaboration will not only strengthen the existing cooperation between KL Kepong and Boustead Holdings, but it provides a major boost to the long-term growth strategy of KL Kepong’s plantation business,” Lee Oi Hian, CEO of KL Kepong said in a statement.
The acquisition will be the third by KL Kepong and its parent Batu Kawan in three years. In 2021, Batu Kawan bought Chemical Co.of Malaysia, while KL Kepong acquired a controlling stake in IJM Plantations.
Batu Kawan, which is controlled by the Lee brothers, is the largest shareholder of KL Kepong. It has interest in plantations, real estate, transportation and chemical manufacturing. With a net worth of $1.35 billion, the brothers were ranked No. 15 in the Malaysia Rich List published in May.