Sime Darby Berhad (BM: 4197) has directly told FreightWaves it paid about NZ$211 million (US$136 million) to acquire automotive and construction machinery dealer Gough Group of New Zealand.
In response to questions from FreightWaves, following our initial reporting, Sime Darby commented that the deal provided a “rare opportunity” to acquire a Caterpillar construction machinery dealership and gain exposure to the construction sector in New Zealand.
A spokesman for the company added that Gough Group’s transport and materials-handling businesses will “complement” Sime Darby’s commercial trucking business in New Zealand. This will help the group grow its aftersales operations and broaden its suite of franchises, “essentially strengthening our position in the Australasian motors sector,” the spokesperson wrote.
The deal enables Sime Darby to obtain exposure to New Zealand’s forestry industry. The company said that it invests for the long term and “sees a strong long-term future for NZ forestry.”
According to New Zealand’s Ministry of Primary Industries, forestry is a “significant industry” in the country, with an annual gross income of NZ$5 billion (US$3.21 billion) contributing about 3 percent of New Zealand’s gross domestic product and directly employing about 20,000 people.
It appears that the Malaysian Sime Darby likes Gough Group just the way it is. When queried by FreightWaves, a spokesman for Sime Darby responded that it will not stop, de-fund or de-invest any programmes at Gough, nor will it dispose, sell or simply stop any parts of that business.
Sime Darby also told FreightWaves that there will not be any redundancies or any reductions in headcount at Gough Group because of the deal.
“Employees of the Gough Group will remain employed by the company with no impact to their terms and conditions,” a Sime Darby spokesperson wrote to FreightWaves.
Sime Darby also will be keeping on the “core” of the existing management at Gough so as to build on the group’s position in the New Zealand and Australian markets.
The Kuala Lumpur company has been selectively making acquisitions in the region. In late October, wholly owned subsidiary Sime Darby Industrial Australia announced it had agreed to buy Brisbane, Australia-based Heavy Maintenance Group. HMG is a specialist in the manufacture, refurbishment and surface finishing of equipment components for its customers in the mining, oil and gas and other heavy industries around Australia and Asia Pacific.
A Sime Darby spokesman responded to FreightWaves that the HMG acquisition had “helped to strengthen, complement and help grow Sime Darby’s Industrial business in Australia and Asia Pacific markets.”