Temasek, JTC give official blessing to merger of subsidiaries

(From left) CEO of Ascendas-Singbridge Miguel Ko, chairman of Ascendas-Singbridge Wong Kan Seng, chairman of Surbana-JIH Liew Mun Leong and CEO of Surbana-JIH Wong Heang Fine, pictured after the press conference held by Temasek and JTC to announce th
(From left) CEO of Ascendas-Singbridge Miguel Ko, chairman of Ascendas-Singbridge Wong Kan Seng, chairman of Surbana-JIH Liew Mun Leong and CEO of Surbana-JIH Wong Heang Fine, pictured after the press conference held by Temasek and JTC to announce the merger of their four subsidiaries into a single platform on Feb 16, 2015. -- ST PHOTO: MARK CHEONG

SINGAPORE - JTC Corporation and Temasek, the Singapore investment company, have officially sealed their agreement to merge four of their subsidiaries into a single platform that will become one of the region's largest integrated urban development companies.

A potential merger of JTC's Ascendas and Jurong International Holdings (JIH) as well as Temasek's Surbana and Singbridge was first announced in September 2014. The sealing of the partnership was formally announced by senior figures from both parties in a press conference on Monday.

The new platform - with an aggregate value of around $5 billion - will be a 49:51 partnership between JTC and Temasek.

The four companies will be organised into two units within the entity. Ascendas and Singbridge will become the asset investment and holding arm, while Surbana and JIH will be the technical unit offering construction and engineering services.

Current Singbridge chairman Wong Kan Seng will be the chairman of the investment and holding unit, while current chief executive of Singbridge Miguel Ko will become the chief executive.

Meanwhile, Surbana chairman Liew Mun Leong will chair the technical unit, with Mr Wong Heang Fine becoming its chief executive.

At the press conference on Monday, Mr Wong Kan Seng said the merger will better position the involved companies to tap the investment opportunities rising from Asia's rapid urbanisation.

"As an integrated company, we will have better scale and deeper expertise to handle many large scale and complex urban development projects," Mr Wong noted.

The four companies are already well-established players in city and industrial development across the region. For instance, Surbana has built over one million homes in Singapore and 100,000 housing units in China, while JIH has planned and built industrial parks in Singapore, China, India and the Middle East.

Mr Liew Mun Leong said that the Surbana-JIH unit is set to grow their consultancy fees of $500 million currently to $1-1.5 billion in the next three to five years as a result of the merger, while doubling their combined headcount of 3,200 people.

Asked whether the merger will lead to any headcount redundancy, Mr Wong said employees involved should view this as a positive development that puts their companies on a faster growth track.

The merger is set to be completed by the first half of this year.