Synergy Drive, set for November listing, could reap RM500 million a year, with the bulk of the synergies coming from its plantation business

Synergy Drive Bhd, which is set to become the world’s largest listed plantation firm, could produce merger synergies of RM500 million a year by cutting costs and boosting revenue.

This means that it could boost operating profit by as much as half a billion ringgit starting fiscal 2010, according to a circular to shareholders.

The bulk of the synergies will come from its plantation business, which makes up about 41.5 per cent of its operating profit, chief executive designate Datuk Seri Ahmad Zubir Murshid said in a statement.

Synergy Drive will merge the businesses of Sime Darby Bhd, Golden Hope Plantation Bhd, Kumpulan Guthrie Bhd and their subsidiaries. It is set to be listed on Bursa Malaysia in November.

Based on last year’s results of the respective companies, Synergy Drive would post an annual revenue of RM26 billion and an operating profit of more than RM2.7 billion a year.

The eight companies released their circular to shareholders yesterday. Shareholders are set to vote on the proposed deal next month.

Synergy Drive will cut costs in the usage of its mills and fertilizers due to its large size. This means it could eliminate overlaps in its businesses

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