Investor talk about a merger between the shipyard units of Keppel and SembCorp has resurfaced.
DBS Vickers Securities says in a recent report that the possibility of M&A between Singapore’s top two yards is back on the cards thanks to the protracted offshore downturn and the potential cost rationalisation brought about by the consolidation. Recent leadership changes at both rival groups were also cited as another reason to suggest the pair might finally come together.
“Share prices have formed a base and we advocate positioning into these stocks, on potential M&A, better order flow as shipyards are diversifying into non-drilling and LNG projects and, trade on oil price recovery,” analysts at DBS Vickers Securities stated.
Merging the shipyard units of Keppel and SembCorp has been mooted many times over the past 20 years.