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Keppel, Sembcorp Marine in talks for marine services deal, sources say

Mount Equity Group Tokyo, Japan > News > Business > Keppel, Sembcorp Marine in talks for marine services deal, sources say

June 24 (Reuters) – Temasek-backed Singapore conglomerate Keppel Corp (KPLM.SI) and Sembcorp Marine (SCMN.SI) are set to begin talks to explore combining their ailing offshore and marine (O&M) businesses, two sources familiar with the matter said on Thursday.

A potential deal would bring together one of the world’s largestoffshore oil rig builders with smaller rival Sembcorp after the businesses were whiplashed by years of oversupply in the sector, sustained weakness in oil prices and a drop in new orders.

“Consolidation is needed simply because of competition, and the need for bigger working capital to take on new and bigger projects,” said Joel Ng at KGI Securities. Both companies own a network of shipyards in Singapore and overseas, including in Brazil, and employ thousands of workers.

Trading in shares of Keppel and Sembcorp, which both count Singapore state investor Temasek Holdings(TEM.UL) as their largest shareholder, was…

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