(File pix) Permodalan Nasional Bhd (PNB) is merging two of its biggest property companies, SP Setia Bhd and I&P Group Sdn Bhd in a move to extract value from its portfolio of companies, and also to create the largest property group in Malaysia. Pix from PNB Website

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) is merging two of its biggest property companies in a move to extract value from its portfolio of companies, and also to create the largest property group in Malaysia.

The two are SP Setia Bhd, the country’s most profitable property company and I&P Group Sdn Bhd, which was formed in May 2009 after the successful mergers and rationalisation of three property giants – Island & Peninsular Sdn Bhd, Petaling Garden Sdn Bhd and Pelangi Sdn Bhd.

"PNB is merging the two companies to extract more value from land development. Both companies have huge assets in terms of valuable landbank and investment properties in strategic locations," a source close to PNB told Business Times.

SP Setia, which has a strong balance sheet, has more than 4,700 acres and several projects in five countries, while I&P has more than 5,000 acres with a focus on Malaysia.

The signing of a memorandum of intent on the proposed acquisition of I&P Group Sdn Bhd will be held this morning.

At the same event, SP Setia will be signing a sales and purchase agreement with Seriemas Development Sdn Bhd, also a PNB subsidiary, to acquire the latter's Bangi Estate.

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