Keppel and Sembmarine require more time to finalise the proposed merger, with exclusive negotiations extended until April 30.
Keppel Corporation and Sembcorp Marine (Sembmarine) announced on Thursday, March 31, that more time is needed to advance their proposed merger, despite making “significant progress” in the talks. The two companies, which first revealed discussions on a potential combination nearly nine months ago, stated that further deliberation is required to complete due diligence, reach mutual agreement on transaction terms, and finalise legal documents.
In a filing with the Singapore Exchange, the companies revealed their commitment to continue exclusive negotiations, aiming to reach a definitive agreement by April 30, 2024. The process is said to be progressing with “considerable resources” dedicated to the discussions.
When the merger talks were initially announced in June 2023, the companies outlined their vision for a stronger combined entity that could leverage greater scale, capabilities, and market footprint to compete for larger contracts. They believe that the proposed combination would help the companies better respond to the dramatic changes in the global offshore, marine engineering, and energy sectors.
Both companies reiterated that the merger is designed to enhance their competitive positions and generate long-term value for shareholders. In addition, Keppel provided an update on its efforts to divest Keppel O&M’s legacy rigs and associated receivables, which would be sold to a separate company largely owned by external investors. This transaction is also advancing and is intended to be inter-conditional with the merger.
Despite these ongoing efforts, Keppel and Sembmarine cautioned that no definitive agreements have been reached yet, and there is no guarantee the merger will proceed. They reminded shareholders to exercise caution, as the transaction is still subject to various approvals, including regulatory and shareholder consent.
On the stock market, Keppel Corporation’s shares saw a slight decline of 1.1% to S$6.42, while Sembmarine’s shares dropped by 1% to S$0.098 following the announcement. The companies have promised further updates as the negotiations continue.
