TMK Chemical Bhd has proposed to acquire Chemical Company of Malaysia Bhd (CCM) from Batu Kawan Bhd in a RM920 million cash-and-shares deal, a move that would significantly expand its business footprint and make Batu Kawan a major shareholder in the listed chemicals company.
In a filing with Bursa Malaysia, TMK said it had submitted a non-binding letter of intent to acquire 100% of CCM, excluding associate company Orica-CCM Energy Systems Sdn Bhd and two land parcels linked to that business. These assets will be transferred out at cost before or after the completion of the deal, subject to approvals.
The proposed RM920 million purchase price will be settled through a mix of cash and newly issued TMK shares.
TMK said the cash component will be funded through proceeds from its December 2024 listing, bank borrowings, and internally generated funds, while the share portion will be issued at RM1.9098 per share, based on the company’s five-day volume-weighted average price as of May 31.
Upon completion, Batu Kawan is expected to own at least a 20% stake in TMK, positioning it as the company’s second-largest shareholder.
The transaction is considered a related-party deal, as TMK’s largest shareholder, Datuk Lee Soon Hian, is the younger brother of Batu Kawan chairman Tan Sri Lee Oi Hian. As such, the proposal will require approval from non-interested shareholders and reviews by independent advisers.
In a separate statement, Batu Kawan said its board — excluding interested directors — had agreed in principle to the offer, subject to due diligence, independent advice, and the signing of a definitive sale and purchase agreement.
The proposed disposal comes around five years after Batu Kawan privatised CCM. In 2020, the group acquired a 56.32% controlling stake in CCM from Permodalan Nasional Bhd (PNB) for RM292.8 million, before completing the privatisation in 2021.
CCM manufactures a range of industrial and specialty chemicals, including chlor-alkali products, sulphur derivatives, and polymer coatings, serving industries such as water treatment, healthcare, manufacturing, agriculture, and rubber.
For TMK, the acquisition would mark a major expansion beyond its core chemical storage and logistics business into manufacturing, allowing it to move further up the value chain through CCM’s established production capabilities.
The proposed deal also comes as Batu Kawan pursues other strategic investments, having recently acquired a 47.7% stake in MKH Bhd for RM549.8 million, triggering a mandatory general offer for the remaining shares.
While the CCM acquisition remains subject to approvals and due diligence, the move signals a potential portfolio rebalancing by Batu Kawan, allowing it to monetise a mature asset while retaining exposure through a substantial stake in TMK.
Both parties have agreed to a two-month exclusivity period to negotiate the deal, with due diligence expected to be completed within one month of offer acceptance.
