Malaysia decides against $1.9B buyout of passport supplier

The Malaysian government has decided against purchasing Datasonic Technologies for $1.9 billion, according to the National Security Council's statement. The government reiterated its commitment to securing the identities of Malaysian citizens, outlining that the decision would be made through legal, financial, governance, and security frameworks.

Datasonic Technologies supplies passports and identity cards to the Malaysian government until 2032, with the total value of the contracts amounting to around RM2.46 billion. NexG, Datasonic's parent company, informed the bourse after a July meeting with the finance ministry that the government had requested an indicative valuation for a potential acquisition of the wholly owned unit, which was an internal figure and not an independent or agreed transaction price.

NexG's management warned that selling the unit could have a significant impact on its operations, financial performance, and listing status. Both NexG and Datasonic expressed their support for the government's decision, stating that the subsidiary would remain dedicated to maintaining high standards of security, integrity, and reliability.

NexG's statement on Sunday confirmed that the continuation of the raw identity card production contract for Malaysia would allow the company to proceed with its strategic expansion plans domestically and internationally as initially planned.