After merger, Keppel, Sembcorp Marine to see long-term, short-term benefits

Keppel will focus on asset-light businesses whilst Sembcorp will be more competitive.

Keppel Corporation (KEP) and Sembcorp Marine (SMM) will see long-term and short-term benefits in their companies following their declaration of merger last month, UOB KayHian, investment banking firm, reported.

To recall, KEP signed definitive agreements with SMM for the proposed combination of the  Keppel Offshore & Marine (KOM) with Sembcorp to focus on offshore renewables, new energy, and cleaner solutions.

For KEP, its  divestment of its offshore and marine business will help the firm focus on asset-light businesses whilst Sembcorp will become larger and more competitive with strong renewable goals.

As to the shareholders, the merger will allow SMM’s shareholders to receive one combined entity (CE) share for each SMM share held.

Meanwhile, KEP shareholders will realise over $9.4b over time, which is composed of $4.1b, as consideration for Asset Co, $4.9b as the pro forma estimate of the value of KOM, and $500m in cash from KOM to partially redeem certain perpetual securities previously issued to Keppel Corporation.