Quick Take Quick Take: What investors can expect from Keppel | FSMOne SG - Research Highlights

Quick Take

Quick Take: What investors can expect from Keppel Corp and Sembcorp Marine's potential merger

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• Keppel Corporation Limited and Sembcorp Marine Ltd have entered into talks to merge their offshore and marine (O&M) business.

• If the merger goes through, the combined entity would be better positioned to compete for larger contracts and to pursue synergies arising from combined scale, footprint and capabilities.

• Alongside the merger announcement, Sembcorp Marine also announced a 3-for-2 renounceable rights issue to raise SGD 1.5 billion, causing its share price to decline by 27.2% on 25 June 2021.

• Sembcorp Marine has been struggling in recent years, and its investors will be faced with a massive dilution if they choose not to subscribe to the rights.

• However, its outlook looks to be more positive in the longer term. A successful merger would create a stronger Singapore-based global player, and pivoting into the fast-growing renewable and clean energy space is the right strategy moving forward.

: Read the full article here
: Keppel Corporation (SGX:BN4) and Sembcorp Marine (SGX:S51)