Keppel O&M and Sembcorp Marine Decide to Merge

May 2022

On April 27 Keppel Corporation Limited (Keppel) and Sembcorp Marine Ltd (Sembcorp Marine) entered into definitive agreements for the proposed combination of Keppel Offshore & Marine Ltd (Keppel O&M) and Sembcorp Marine. This will also result in Keppel O&M and Sembcorp Marine becoming wholly-owned subsidiaries. Keppel and Sembcorp Marine, both have exquisite track records for quality and reliability in executing complex, large-scale projects.

The Proposed Combination, which follows the signing of a memorandum of understanding between Keppel and Sembcorp Marine on 24 June 2021, will bring together the world-class engineering capabilities and reliability of the two companies with complementary competencies and operations. It is expected to be a premier global player offering offshore renewables, new energy, and cleaner solutions in the offshore & marine sectors.

The Proposed Combination is based on a 50:50 enterprise value ratio between both companies. After taking into account their respective capital structures, the S$500 million cash that Keppel O&M will pay to Keppel, and other adjustments, the agreed equity value exchange ratio will result in Keppel and its shareholders owning 56% of the Combined Entity and Sembcorp Marine shareholders owning 44% on completion.

The Proposed Combination will be subject to the approvals of the shareholders of Keppel and Sembcorp Marine at separate extraordinary general meetings (EGMs), which are expected to be convened in the fourth quarter of 2022.

(Source: KeppelOM)

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