SINGAPORE - Luxury yacht maker Grand Banks Yachts has agreed to buy Australia's Palm Beach Motor Yacht and appoint Palm Beach founder Mark Richards as chief executive officer of the merged group.

Grand Banks and Palm Beach will grant each other options under the deal, Grand Bank said in a statement on Friday.

When the options are executed, Grand Banks will buy all of Palm Beach's shares for up to A$8.0 million (S$9.4 million) in cash and A$2.0 million in new Grand Banks shares to be issued.

The deal will strengthen Grand Banks' position as "a global company with two world-class brands that are well represented in the leading markets of North America, Australia, Asia and Europe", the company said.

Palm Beach designs and builds five different highly-customised yacht models, which are mostly sold in the United States.

Grand Banks and Palm Beach will continue to carry out their manufacturing activities in, respectively, Malaysia and Australia.