Conglomerate Sime Darby and plantation firm Kumpulan Guthrie have announced they will accept acquisition offers, in a prelude to a government-backed merger to create the world's largest listed palm oil company.

The offer came from Synergy Drive, a vehicle set up to merge Sime, Kumpulan Guthrie, and plantation company Golden Hope. All three are government-linked firms.

"The board of Guthrie ... has today, after considering the advice of Guthrie's advisers, decided to accept the offer from Synergy Drive to acquire the entire business and undertaking of the company," Kumpulan Guthrie said in a statement today to the stock exchange.

The acceptance echoed a statement issued by Sime Darby late Wednesday also agreeing to Synergy Drive's offer.

Both companies said they will enter into a definitive agreement with Synergy Drive within 14 days, when more details will be released.

RM31.4 billion merger

Investment giant CIMB, via Synergy Drive, last month proposed the merger between the three companies in a combine valued at RM31.4 billion and will provide seed financing for the deal.

The move is aimed at boosting Malaysia's status as a top palm oil producer amid growing regional competition.

CIMB has said the merger will create a global leader in oil palm plantations, with potential annual revenue of more than 26 billion ringgit.

With plantations amounting to about 600,000 hectares (almost 1.5 million acres), the new firm will control about six percent of the world's crude palm oil supply.

Malaysia's palm oil production accounts for about half of global output and is on track to hit a new record 15.1 million tonnes this year amid strong demand from the global food, bio-diesel and oleochemicals, chemicals derived from biological oils, industries.