Temasek-backed oil rig builders unveil transformative deal
2022.04.27 05:51
FILE PHOTO: The Sembcorp Marine sign is pictured at the shipyard in Singapore, May 23, 2019. REUTERS/Edgar Su
SINGAPORE (Reuters) -Singapore’s Sembcorp Marine (Sembmarine) has agreed to combine with local conglomerate Keppel (OTC:KPELY) Corp’s larger offshore and marine (O&M) unit, a year after the Temasek-backed firms started deal talks to cope with an industry downturn.
“The combined entity will be well-positioned to capture opportunities arising from decarbonisation in the oil & gas sector and from the global energy transition towards renewables, particularly in the areas of offshore wind, and new energy sources,” the companies said in a joint statement on Wednesday.
Sembmarine and Keppel Offshore & Marine, one of the world’s largest offshore oil rig builders, have suffered from a prolonged and severe sector downturn over many years. A surge in oil prices has partly improved the industry outlook.
Once the merger is completed, Keppel and its shareholders will own 56% of the combined entity, while Sembcorp Marine’s shareholders will own the rest. Keppel will distribute in-specie 46% of the merged entity’s shares to its shareholders and retain a 10% stake.
Singapore state investor Temasek, Sembmarine’s majority shareholder, will become the largest shareholder in the combined company with a 33.5% stake.
Sembmarine was valued at S$4.1 billion as of Tuesday’s closing price.
JPMorgan (NYSE:JPM) is the financial adviser to Keppel on the deal, while Credit Suisse (SIX:CSGN) is the financial advisor to Sembmarine.
($1 = 1.3781 Singapore dollars)
