SINGAPORE – After a year of drama and suspense, shareholders of Sembcorp Marine (Sembmarine) voted overwhelmingly for a merger with Keppel Offshore & Marine (Keppel O&M).

During a virtual extraordinary general meeting (EGM) on Thursday, the $4.5 billion deal obtained 95.28 per cent approval from voting shareholders.

Sembmarine needed shareholders holding more than 50 per cent in value of its shares to vote for the acquisition.

State investment company Temasek, which holds 54.6 per cent of Sembmarine as its largest shareholder, abstained from voting. Post-merger, Temasek will hold 35.5 per cent of the new entity.

Keppel Corp shareholders gave their nod to the deal on Dec 8, 2022, with an overwhelming vote of 99.96 per cent.

After the deal is completed, Keppel O&M will become a wholly owned subsidiary of Sembmarine, which will remain listed on the mainboard.

Current chief executive of Keppel O&M, Mr Chris Ong, will be appointed CEO of the enlarged Sembmarine. Current Sembmarine CEO Wong Weng Sun, who has helmed the company since 2009, will remain as a senior adviser for an interim period.

The board of Sembmarine will be reconstituted, with all but deputy chairman Yap Chee Keong stepping down. Departing chairman Hassan Marican will take up an appointment as adviser to Malaysian Prime Minister Anwar Ibrahim.

The new board will be chaired by Mr Mark Gainsborough, co-founder of Low Carbon Advisors and an experienced business leader in the field of energy transition and renewable energy.

Thursday’s nod by Sembmarine shareholders was the final hurdle towards the merger, first mooted in June 2021 and whose final outcome seemed uncertain till the end.

The saga saw the terms of the deal, announced last April, later revised in October to make it more attractive to Sembmarine shareholders, who would get a slightly larger 46 per cent share in the new entity, compared with 44 per cent under the previous arrangement.

Keppel will receive the remaining 54 per cent – out of which it will retain 5 per cent and distribute 49 per cent of the enlarged Sembmarine share base in specie to its shareholders.

The deal’s financials, board accountability and the conduct of the EGM had also been questioned by the Securities Investors Association (Singapore) on behalf of shareholders.

With the deal, the two companies will be merged to form one of the world’s largest O&M energy engineering companies, with a total order book of almost $20 billion.

The fortunes of the two home-grown giants have suffered in recent years, with falling oil prices and the global transition towards renewable energy. By combining their operating and engineering capabilities, the combined entity would be better positioned to capture growth opportunities as it would have the necessary scale and clout, the companies said.

Mr Nagi Hamiyeh, the head of Temasek’s portfolio development group, said: “We are pleased that our fellow shareholders have expressed strong support for the combination, which will see the formation of a stronger and larger entity that will bolster Singapore’s position as a maritime and offshore and marine hub.

“As countries race to meet climate targets, we expect more global opportunities in new energy and renewables that the enlarged entity can take on with its combined strength and capabilities.”

After resuming trading in the afternoon, Sembmarine shares closed up 0.1 cent, or 0.7 per cent, at 13.6 cents.

They were halted from trading for the vote before the market opened on Thursday.