KUALA LUMPUR: Sunway Bhd plans to enter into Sabah's pavement market through the acquisition of concrete block manufacturer Telipok Concrete Sdn Bhd for RM2.9 million.
Sunway said the proposed acquisition will enable it to penetrate and expand into the Sabah pavement market, as well as increase its distribution network to cover Sabah, Sarawak and Brunei.
In a filing with Bursa Malaysia, Sunway said its wholly-owned subsidiary Sunway Holdings Sdn Bhd has entered into a share sale agreement (SSA) with Klaus Gunther Neuendorff and Vanessa Anne Marcus for the proposed acquisition.
Sunway said there is an increase in construction activities in Sabah and Sarawak, citing the RM27 billion Pan Borneo Highway, RM1.9 billion Samalaju Industrial Park Bintulu and other real estate developments in Kota Kinabalu, Miri, Bintulu and Kuching.
"Sunway considers it ideal to locate a production plant in Sabah, specifically in Kota Kinabalu, since Sabah has a vibrant construction sector in Sabah and Sarawak," the filing added.
Sunway said it will fund the proposed acquisition through internal funds.
"Barring any unforeseen circumstances, the proposed acquisition is expected to be completed by March 2018," the filing added.
Sunway shares climbed two sen or 1.2% to close at RM1.69, for a market capitalisation of RM8.27 billion.