Singapore’s Sembcorp Marine has agreed to combine with local conglomerate Keppel’s larger offshore and marine unit, a year after the Temasek-backed firms started deal talks to cope with an industry downturn.
Keppel Offshore & Marine, one of the world’s largest offshore oil rig builders, and Sembcorp Marine have suffered from a prolonged and severe sector downturn over many years.
A surge in oil prices has partly improved the industry outlook.
“The combined entity will be well-positioned to capture opportunities arising from decarbonisation 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,” the companies said in a joint statement on Wednesday.
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, Sembcorp Marine’s majority shareholder, will become the largest shareholder in the combined company with a 33.5% stake. The marine company was valued at S$4.1 billion ($3 billion) as of Tuesday’s closing price.
JPMorgan is the financial adviser to Keppel on the deal, while Credit Suisse is the financial advisor to Sembcorp Marine.
- Reuters, with additional editing by George Russell