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Valued at US$ 3,4 billion, the mega-merger between the companies started in 2021, aiming to expand operations in the offshore energy market. Sembcorp Marine and Keppel now merge into an even bigger company in the global segment.
The mega-merger project between giant fuel companies Keppel Offshore and Sembcorp Marine is moving forward. Shareholders of the Singapore company approved the merger with the oil company. Proposed in 2021 by the most disruptive , the merger of both now becomes even closer to materialize, placing the new organization at the forefront of the global offshore energy market.
Aiming at the global offshore energy market, shareholders of Sembcorp Marine approve merger of operations with company Keppel Offshore
Moving towards the completion of the transaction, Sembcorp Marine's Singapore shareholders have given final approval for the merger process with Keppel Offshore & Marine.
The combination of the operations of both companies will create one of the largest companies in the global offshore energy market.
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This is a move by major players in the field of energy engineering, marking a breakthrough in the presence of the new organization in the segment.
First proposed in June 2021, the deal is valued at approximately $3,4 billion. It positions companies towards a promising future in the global energy sector.
After the corruption scandal involving Keppel and its representatives in the Brazilian market in 2017, there was some suspense regarding the shareholder vote of Sembcorp Marine.
However, the high potential of the new company formed by the mega-merger of both gave rise to uncertainties in the vote, which ended in favor of the union.
The final count reported to the Singapore Stock Exchange showed that over 95% of the total vote was in favor of the merger.
With the drop in oil prices and the growing focus on alternative energy sources in recent years, the offshore energy market has declined exponentially.
Thus, the merger of both companies was announced as a move to recover the segment, as Keppel and Sembcorp Marine have a strong presence in the sector.
They highlighted that, by uniting the experience of both, they could not only aim at more sustainable projects, but also at reducing costs.
Keppel Offshore will own a 56% stake in the new combined company, while Sembcorp Marine will own a 46% stake.
Going mildly against the original terms, Sembcorp Marine shareholders will own a slightly higher 46% stake in the combined company, versus 44% under the original terms.
Meanwhile, Keppel will retain the other 56% and stake in the new offshore energy company.
However, it agreed to reduce its retained stake to 5% from the previous 10%, with the remaining 49% distributed to its shareholders.
According to the companies' forecasts for the future market, the new combined company is expected to have an order backlog valued at nearly US$15 million.
While Keppel will become a true subsidiary of the company, Sembcorp Marine told shareholders that the new board would consider whether a new corporate identity was appropriate as part of a strategic business.
Thus, it is not yet known what direction the mega-merger between companies in the offshore energy market will take.
