Genting’s Big Move: Will the VTO Fix a Low-Return Giant?

Genting has been in the news recently with its voluntary takeover (VTO) proposal to acquire the remaining 51% of Genting Malaysia Berhad that it does not already own.

In my article written before this announcement, I raised concerns about Genting’s weak ROIC, weighed down by a high fixed-cost base. I viewed Genting more as a defensive cash generator than a true growth compounder. Refer to https://www.i4value.asia/2025/10/genting-berhad-asset-rich-but-return.html#more

The VTO signals strategic intent — to unlock better capital allocation, simplify the group structure, and pursue big-ticket ambitions such as potential U.S. expansion.

The move does not change Genting’s underlying operational and efficiency challenges; those remain the key hurdles to long-term value creation.

The weakness lies in capital efficiency — ROIC has rarely cleared 7%. EPS has shrunk over the past decade, and large expansions like Resorts World Las Vegas have lifted fixed costs without delivering matching returns. Unlocking value depends on redeploying cash into higher-return projects and narrowing the gap between ROIC and WACC.

The VTO may simplify Genting’s structure, but only higher returns — not bigger bets — can fix a low-return giant.