JAKARTA (TheInsiderStories) — Siam Cement Group (SCG), a packaging company from Thailand, will become major shareholder of PT Fajar Surya Wisesa Tbk (IDX: FASW) by acquiring 55 percent shares. For the action, SCG invested Rp9.6 trillion (US$665 million).
The acquisition value is below Fajar Surya’ average price, which is tagged at Rp6,897 by SGC. In the last one month, the FASW shares moved in a range of Rp7,675 to Rp8,400. Considering that, the acquisition value could be at around Rp10.45 trillion to Rp11.44 trillion.
As the sentiment is not good for the market, after the acquisition announcement by SGC, Fajar Surya shares dropped 0.63 percent to Rp7,950 in the mid trading.
President and CEO of SCG Roongrote Rangsiyopash in an official statement mentioned that the acquisition is expected to be completed in the third quarter of this year. He disclosed that SGC will use internal sources to finance the investment.
By the acquisition, SGC strives to be leading total packaging solutions provider in ASEAN. It is also considered able to help foster the growth of SCG’s Packaging Business in long run.
“The major shareholding in Fajar Wisesa will allow SCG to enhance its ASEAN growth, especially in Indonesia that provides tremendous future growth opportunity for packaging business,” he said.
Rangsiyopash added: “Considering Indonesia’s population of 270 million and its per capita consumption of packaging paper, the market growth potential there is almost 3 times of Thailand.”
SCG aims to become a leading total packing solutions provider by establishing more production base in ASEAN countries, especially in Vietnam, Malaysia, Indonesia, and the Philippines.
Rangsiyopash said that SCG Packaging business is in the process of exploring the feasibility of raising equity and expected to be completed by the end of 2019.
SCG Packaging Business recorded 87,255 million Baht sales revenue and 6,319 million Baht profit during last year. Meanwhile, with the total sales of 1.38 million tons of packaging paper in 2018, Fajar Surya registered sales of 9.94 trillion Rupiah (21,900 million Baht). It gained Rp1.41 trillion (3,100 million Baht) profit.
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