Temasek bids to take control of Keppel sparking Sembcorp merger rumours

Singapore’s state-owned investment firm Temasek Holdings is making a S$4bn ($2.94bn) offer to increase its stake in Keppel Corporation to take control of the company.

Temasek currently owns 20.45% of Keppel and it is now making a partial offer, through indirect wholly-owned subsidiary Kyanite Investment Holdings, to acquire an additional 30.55% of Keppel. The deal would result in Temasek companies owning 51% in total.

“The partial offer reflects our view that there’s inherent long-term value in Keppel’s businesses, notwithstanding the challenges presented by the current business and economic outlook,” Tan Chong Lee, president of Temasek International, said in a statement.

Following the completion of the deal, Temasek intends to keep Keppel’s listing status on the Singapore Stock Exchange and plans to undertake a comprehensive strategic review of Keppel’s businesses.

Keppel reported a 30% decline in net profit to S$159m ($117m) for the third quarter of this year, comparing with S$227m in the same period of the last year.

This week, Keppel announced the appointment of three independent directors to its board, including Singapore shipping veteran SS Teo, executive chairman and managing director of Pacific International Lines (PIL) as the company works to accelerate transformation and growth.

The acquisition deal could potentially promote a merger between Keppel’s offshore marine unit and its rival Sembcorp Marine as Temasek is already a major shareholder of Sembcorp Marine.

The share price of Sembcorp Marine surged by over 11% while shares of its parent Sembcorp Industries increased by about 9.6% on Monday following Temasek’s announcement of the offer, prompting a query from the Singapore Stock Exchange on the stock’s unusual price movement.

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.
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