TMK Chemical to buy CCM and its nine plants for RM939.9m

TMK Chemical Bhd has agreed to buy Chemical Company of Malaysia Bhd (CCM) from Batu Kawan Bhd for RM939.9 million, paid with RM438.5 million in cash and 262.5 million new TMK shares. It is a purchase of the company, not of its property: CCM's nine plants, on about 122 acres in five states, stay registered to the CCM companies, which become TMK subsidiaries. The agreement was signed on 18 September 2026, and completion is expected in the first quarter of 2027.

The plants that come with CCM

• Kemaman, Terengganu: Malay-Sino Chemical Industries on Lot 4406, Teluk Kalong Industrial Estate (14.02 ha), and See Sen Chemical on PT 3940 in the same estate (12.64 ha)
• Pasir Gudang, Johor: CCM Chemicals on Plot 411, Pasir Gudang Industrial Estate (10.46 ha), and See Sen Chemical on PLO 276 (2.43 ha)
• Ipoh, Perak: Malay-Sino Chemical Industries at 4½ Miles, Jalan Lahat (5.45 ha)
• Bandar Sri Sendayan, Negeri Sembilan: See Sen Chemical in Sendayan TechValley (1.91 ha)
• Shah Alam and Bangi, Selangor: CCM Water Systems on Lots 4 and 6, Jalan Kemajuan Satu 16/17A, Section 16 (1.45 ha); CCM Polymers (7,969 sq m) and Innovative Resins (2,915 sq m) in Selaman Industrial Park, Bangi
• Left out of the deal: two parcels, Lot 3880 in Mukim Bukit Raja, Petaling, Selangor, and Lot 5452 in Mukim Sabai, Bentong, Pahang, together with the associate Orica-CCM Energy Systems. These go back to the sellers

The price

• How it was set: an agreed RM920 million for the shares, free of cash and debt, at 31 May 2026, plus CCM's RM99.5 million of cash and less its RM79.6 million of debt
• How it is paid: RM438.5 million in cash, of which RM99.1 million comes from TMK's IPO money and the rest from borrowings or internal funds, and 262.5 million new TMK shares at RM1.9098 each, 38.4% below TMK's last price of RM3.10 before the signing
• Multiples: 12.9 times CCM's adjusted profit of RM72.7 million for the year to September 2025, and 5.9 times EBITDA. TMK's chosen listed peers trade at 11.0 to 16.1 times earnings
• The seller: Batu Kawan has put RM861.2 million into CCM since 2020. It expects a pro forma gain of about RM598 million and will use the cash mainly to repay borrowings

Family on both sides

• Who is connected: TMK's largest shareholder, Dato' Lee Soon Hian (39.5%), is the brother of Batu Kawan's chairman, Tan Sri Lee Oi Hian, and its managing director, Dato' Lee Hau Hian. TMK director Lee Yan Ling, his daughter, abstained from the board's decision
• After the deal: Batu Kawan will own 20.8% of TMK and Lee Soon Hian 31.3%. Counting the others treated as acting with Batu Kawan, mostly Lee family members, the group will hold 57.4%, so Batu Kawan is asking the Securities Commission to excuse it from making an offer for the rest of TMK
• Approvals: the non-interested shareholders of both TMK and Batu Kawan, the Securities Commission and Bursa Malaysia

TMK told The Edge that execution risk is low because it knows the industry and already does business with CCM, which its filing says supplies it with acid, alkali and salt. It expects the benefits to come gradually rather than at once.

Cover photo: CCM (ccmberhad.com), via The Edge Malaysia.