New titan rises as Malaysia’s Sunway makes RM11 billion move on construction bigwig IJM

[KUALA LUMPUR] Malaysian blue-chip conglomerate Sunway has rolled out a RM11 billion (S$3.5 billion) share-and-cash takeover of IJM Corporation, aiming to combine two of the country’s largest construction and property players into a powerhouse with a market value of nearly RM50 billion.

The long-speculated merger of the giant entities would knit together a land bank of 2,300 hectares, RM118.1 billion in gross development value and a potential RM13 billion order book into a single, enlarged platform.

The complementary fit between Sunway and IJM would position the enlarged group to pursue larger projects, including large-scale data centres, industrial facilities and public infrastructure developments, said Sunway president Anuar Taib at a media briefing on Monday (Jan 12).

Sunway is a family-controlled conglomerate founded by Malaysian tycoon Jeffrey Cheah, who remains the dominant shareholder. IJM’s largest single shareholder is the Employees Provident Fund, with a stake of about 18 per cent.

Under the conditional voluntary takeover offer, Sunway has proposed to acquire IJM Corp at RM3.15 a share – a 14.6 per cent premium to IJM’s last closing price of RM2.75, and between 17.6 per cent and 28 per cent over its volume-weighted average market prices across the past one, three and six months.

“The deal is aimed at unlocking synergies and building a ‘national champion’ with greater scale and capability, while generating spillover effects across industries including real estate and construction,” said Anuar.

The merged entity is expected to have a market capitalisation exceeding RM47.7 billion, surpassing peers such as Gamuda and KLCC Property, and placing the group among the top 10 companies on Bursa Malaysia.

Both companies announced share trading suspensions on Monday. Sunway shares closed at RM5.60 on Jan 9, while IJM shares last traded at RM2.75. Both companies will resume trading on Tuesday.

The offer will be satisfied by a 10 per cent cash payment, with the remaining 90 per cent settled through the issuance of new Sunway shares at RM5.65 each. For instance, a shareholder who has 1,000 IJM shares will receive RM315 in cash and about 501 Sunway shares.

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Chief financial officer Clement Chen said that, in total, the takeover offer will be satisfied with cash of RM1.1 billion and the issuance of RM9.9 billion worth of newly issued Sunway shares. The cash consideration will be funded through a combination of debt financing and internally generated funds.

At the offer price, the transaction values IJM at an implied enterprise value-to-Ebitda multiple of 11.8 times, and a price-to-earnings ratio of 27.4 times, based on IJM’s audited earnings for the year ended Mar 31, 2025.

Titan in the making

Anuar said the combined talent pool is an asset to the company, noting there are no layoff plans following the merger. “We expect everyone to remain in their roles and continue delivering value,” he said.

Large-scale mergers among Malaysian property and construction groups are rare, but not unprecedented.

In 2010, UEM Land Holdings, backed by sovereign fund Khazanah Nasional, launched a landmark nearly RM1.4 billion takeover of Sunrise. The deal, completed in 2011, led to the creation of UEM Sunrise.

The offer is conditional on Sunway securing acceptances that would lift its ownership above 50 per cent of IJM’s voting shares, as well as obtaining the relevant regulatory approvals and approval from Sunway shareholders.

Chen said the transaction is expected to be completed by the third quarter of 2026, subject to those approvals.

Diversified group

Upon completion, if IJM’s public shareholding spread falls below the prescribed requirements following the offer, Sunway said it may seek to delist IJM.

UBS’ Singapore branch has been appointed international financial adviser for the offer; Maybank Investment Bank is acting as principal adviser to Sunway.

IJM is a diversified group spanning construction, property, industry and infrastructure, with IJM Land among the country’s largest township and mixed-use developers.

Its Johor portfolio includes the Sebana Cove integrated golf, marina, resort and residential township near Pengerang, as well as urban residential projects such as Austin Duta in the Johor Bahru growth corridor.

The group has developments across Penang, Greater Kuala Lumpur, Negeri Sembilan, Johor, Sabah and Sarawak.

Sunway, meanwhile, is anchored by its “build-own-operate” township model. In Johor, its flagship Sunway City Iskandar Puteri spans about 730 hectares along the Iskandar Puteri waterfront.

The group is also developing a RM4 billion transit-oriented mixed-use project with MRT Corp at Bukit Chagar, positioned to benefit from the upcoming RTS Link to Singapore.

Regionally, Sunway has expanded aggressively in Singapore through its Sunway MCL arm.

After the landmark RM2.4 billion acquisition of Hongkong Land’s MCL Land business in 2025, the group’s attributable project value in the city-state surged to nearly RM15 billion.

Sunway has also unveiled plans to list its healthcare arm by March 2026 in a deal expected to raise more than RM3 billion, potentially marking Malaysia’s largest IPO since 2017.