Malaysia’s Sime Darby, the world’s top oil palm planter has offered $1.74 billion for New Britain Palm Oil Ltd. as the company seeks brown field assets that would immediately add to earnings upon posting a 9% decline in net profits for the year to June. The offer proffered stands at an 85% premium to New Britain Palm Oil’s latest closing share price. Malaysia-listed Sime Darby is a significant foreign operator in the palm oil sector in Indonesia where government officials are debating limiting foreign ownership of plantations to 30% from the current limit of 95%. Upon closing, the deal would give Sime Darby significant land holdings in Papua New Guinea and would increase Sime Darby’s acreage from 864,111 hectares to approximately 1 million hectares. New Britain Palm Oil’s yields have reached 26 tons per hectare, exceeding the average yield of 20 tons per hectare achieved in the growing region of Sabah, and the addition of New Britain Palm Oil’s two refineries in Papua New Guinea and the UK would raise Sime Darby’s refining capacity by 300,000 tons to 4.05 million tons per year.
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