Holding orders of 92 billion! Merger of two major marine engineering giants in Singapore completed
2023-03-03 09:00
After nearly a year, the merger of Sembcorp Marine and Keppel Offshore & Marine, two of Singapore's largest offshore and marine giants, has finally been completed.
On February 28, Sembcorp Marine issued an announcement stating that the proposed merger with Keppel Offshore & Marine had been finalized. Sembcorp Marine acquired all the issued and paid-up capital of Keppel Offshore & Marine and then issued 36,848,072,918 Keppel Offshore & Marine consideration shares for the merger. Following the transaction, Keppel Offshore & Marine shareholders own 54% of the merged company, Sembcorp Marine shareholders will hold 46% of the expanded company, and Keppel Corporation and its shareholders will own 54%.
The merged company will trade on the Singapore Exchange under the name of Sembcorp Marine. Chris Ong, the former head of Keppel Offshore & Marine, has been appointed CEO of the new company.
It is understood that Sembcorp Marine reached an agreement with Keppel Corp last April, planning to merge Keppel Offshore & Marine and Sembcorp Marine to create a world-leading company focused on offshore renewable energy, new energy, and clean solutions for the offshore and marine vessel industry. In October of the same year, the two parties revised the terms of the agreement, changing the merger transaction to an acquisition, with Sembcorp Marine directly acquiring 100% of Keppel Offshore & Marine from Keppel Corporation. The "Combined Entity" in the previous agreement will no longer exist, and the planned one-for-one share swap between the proposed combined entity and Sembcorp Marine, as well as the plan to transfer Sembcorp Marine's listing status to the combined entity, will no longer apply.
Sembcorp Marine will retain its listing status on the mainboard of the Singapore Exchange and, if approved by minority shareholders, will issue new Sembcorp Marine shares directly to Keppel Corporation. After the transaction, Keppel Offshore & Marine will become a wholly-owned subsidiary of Sembcorp Marine. In January this year, the transaction received approval from the Singapore Exchange.
On February 16, Sembcorp Marine held a special shareholders' meeting and overwhelmingly approved the merger transaction. Temasek Holdings, Singapore's sovereign wealth fund, which holds 54.6% of Sembcorp Marine's shares, chose to abstain. After the merger, Temasek will become the largest shareholder of the merged company, holding 33.5%.
The Keppel Offshore & Marine acquired by Sembcorp Marine will not include its legacy completed and uncompleted drilling rigs and related receivables, which have been sold to an independent asset company (Asset Co). In addition, Keppel Corporation will retain assets such as Keppel Offshore & Marine's interests in Floatel International Ltd and Dyna-Mac Holdings Ltd.
Last April, Keppel Corporation signed agreements with two external investors to sell Keppel Offshore & Marine's legacy completed and uncompleted drilling rigs and related receivables to an independent asset company. External investors will own 90% of the asset company, and Keppel Corporation will hold the remaining 10%.
Sembcorp Marine said the merged company will have a hand order book of approximately S$18 billion (approximately RMB 92.018 billion), and is expected to benefit from a broader geographic footprint, larger scale of operations, and greater synergies from the combined capabilities of two leading offshore and marine companies in Singapore.
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