Singapore’s Keppel O&M and Sembcorp Marine ink definitive merger deal

Singapore’s Keppel Corp said its unit Keppel Offshore & Marine and compatriot Sembcorp Marine have signed a definitive merger deal. The deal would create a “premier global player” focusing on offshore renewables, new energy and cleaner solutions in the offshore and marine sector.

This agreement follows a memorandum of understanding the firms revealed in June last year.

Keppel said in a statement on Wednesday the combined entity would be “well-positioned” to capture opportunities arising from decarbonization in the oil and gas sector and from the global energy transition towards renewables, particularly in the areas of offshore wind, and new energy sources such as hydrogen and ammonia.

The proposed combination involves the establishment of a new holding company which will combine the businesses of Keppel O&M and Sembcorp Marine via separate schemes of arrangement.

$6.83 billion in value for Keppel

Also, the proposed deal and legacy rigs sale, estimated on a pro forma basis, would allow Keppel to realize about S$9.42 billion ($6.83 billion) in value, it said.

This includes S$4.87 billion from Keppel O&M’s combination with Sembmarine, S$500 million in cash, and S$4.05 billion from the sale of Keppel O&M’s legacy rigs and associated receivables to Asset Co, it said.

Keppel said it would receive equity shares representing a 56 percent equity interest in the combined business. After that, it would distribute to its shareholders 46 percent of the equity shares in the combined entity.

Keppel O&M and Sembcorp Marine have both strong presence in the LNG industry and they own a network of shipyards in Singapore and overseas.

Among others, their combined experience includes building all kinds of LNG vessels as well as LNG-powered ships. The duo also repairs and converts LNG vessels.

Keppel O&M also has a stake in Singapore’s first LNG bunkering vessel and in Qatar-based shipyard N-KOM.

The combination remains subject to the approvals of the shareholders of Keppel and Sembcorp Marine at separate extraordinary general meetings scheduled in the fourth quarter of this year.

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