Malaysia Rejects RM7.5 Billion Datasonic Technologies Buyout
Malaysia's government will not acquire Datasonic Technologies, the national passport and identity card supplier. The National Security Council ruled out the RM7.5 billion deal, which was an internal estimate from parent company NexG.
Government Rules Out Acquisition
Malaysia's government rejected a potential acquisition of Datasonic Technologies, a key national supplier. The company provides passports and identity cards for the country. The National Security Council ruled against the deal. Datasonic's parent company, NexG, had preliminarily valued the unit at RM7.5 billion (US$1.9 billion).
This valuation was an internal estimate by NexG's management, not an independent assessment, agreed transaction price, or firm offer, NexG stated.
Security and Sovereignty Concerns
The government's decision reflects a commitment to safeguarding the security and sovereignty of Malaysian identities. The National Security Council stated the matter would be governed through existing legal, financial, governance, and security frameworks. Datasonic holds government contracts to supply passports and identity cards through 2032.
These agreements are collectively worth about RM2.46 billion, Bloomberg reported. The Finance Ministry had asked NexG in July to submit an indicative valuation for a potential acquisition of the wholly owned Datasonic unit.
NexG's Strategic Outlook
NexG described Datasonic as a core part of its business. The company had previously warned that selling the unit could materially affect its operations, financial performance, and listing status. Both NexG and Datasonic welcomed the government's decision to not proceed with the takeover.
NexG announced that Datasonic would continue focusing on maintaining high standards of security, integrity, and reliability in its services. The continuation of the raw identity card production contract for Malaysia allows NexG to pursue its strategic expansion plans in domestic and international sectors, the company stated on Sunday.
This decision removes uncertainty for NexG investors regarding a major corporate transaction. The company can now focus on its stated expansion strategy, rather than a government-led divestment. For the broader Malaysian market, this demonstrates the government's stance on critical national infrastructure suppliers.
It shows a preference for contractual oversight over direct state ownership for certain sensitive services. Companies providing essential government services in Malaysia may see similar scrutiny on ownership structures.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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