Mergers and Acquisitions

escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Mergers and Acquisitions

Unread post by escveritas »

  • Proposed merger of Premier and Chrysaor Holdings Limited (“Chrysaor”) and the reorganisation of Premier’s existing finance arrangements
06 Oct 2020

Premier and Harbour are pleased to announce that they have reached agreement with Harbour’s UK operating company Chrysaor, regarding a proposed all share merger between Premier and Chrysaor (the “Combined Group”) and the reorganisation of Premier’s existing debt and cross-currency swaps (together, the “Transaction”).

The Transaction will create the largest independent oil and gas company listed on the London Stock Exchange with combined production of over 250 kboepd (as at 30 June 2020). In addition, the Combined Group will have a strong balance sheet and significant international growth opportunities.

Key highlights
  • Premier to merge with Chrysaor through a reverse takeover; London listing retained
  • The Transaction is expected to result in Premier’s stakeholders owning up to 23 per cent of the Combined Group and Harbour and other Chrysaor shareholders owning at least 77 per cent
Premier’s shareholders are expected to own up to 5.45 per cent1 of the Combined Group
Chrysaor’s largest shareholder, Harbour, is expected to own up to 39.021 per cent of the Combined Group
  • Premier’s approximately US$2.7 billion of total gross debt and certain hedging liabilities will be repaid and cancelled on completion
A cash payment of US$1.232 billion will be made to financial creditors of Premier and its subsidiaries (together, the “Premier Group”) and Premier Group’s cross-currency hedge counterparties (the “Existing Creditors”); Premier’s approximately US$400million of letters of credit will be refinanced; Existing Creditors will also receive shares in the Combined Group
  • The Combined Group’s Board of directors will comprise 11 directors including six independent non-executive directors and three executive directors including Linda Z. Cook (currently CEO of Harbour) who will be CEO of the Combined Group and Phil Kirk (currently CEO of Chrysaor) who will be President of the Combined Group and CEO Europe; the two other non-executive directors will be appointed by Harbour
  • The Transaction is subject to regulatory approvals and approval by Premier’s shareholders and the Existing Creditors
Rationale and benefits of the Transaction

The Boards of Directors of Premier and Harbour believe the Transaction will:
  • Bring together two complementary businesses to create the largest London-listed independent oil and gas company by production and reserves
Combined production as at 30 June 2020 of over 250 kboepd and combined 2P reserves of 717 mmboe as at 31 December 2019
Combined 2020 H1 revenue of US$1.76 billion and H1 EBITDAX of US$1.27 billion
Competitive operating costs of US$10.5/boe in H1 2020
Sector leading strategies to reduce the carbon footprint of their operations
  • Result in a Combined Group with significant scale and diversification, through the combination of material operated and non-operated cash generative production hubs in the UK North Sea
  • Create a business with a stable platform for future growth and the ability to fund and realise value from its development portfolio and international exploration projects
  • Transform Premier’s financial position, delivering a Combined Group with a strong and sustainable financing structure with resilience to compete in a lower commodity price environment; anticipated combined accounting net debt (excluding Letters of Credit) of approximately US$3.2 billion on completion
  • Create substantial cost and tax synergies, accelerating the use of Premier’s c. US$4.1 billion of UK tax losses and unlocking significant value for shareholders
  • Create a combined business with the potential to offer a meaningful dividend for shareholders over time
Conditions to closing

The Transaction is subject, amongst other things, to regulatory, shareholder and Existing Creditors’ approval.

Since the Transaction constitutes a reverse takeover for the purposes of the Listing Rules, Premier will need to seek shareholder approval and re-admission of its ordinary shares upon completion to the Official List of the FCA and to trading on the main market of the London Stock Exchange. Premier will in due course send a prospectus and circular to its shareholders convening a general meeting to approve the Transaction.

Premier’s Board intends to provide its unanimous and unconditional recommendation to Premier’s shareholders to vote in favour of the Transaction, as the Premier directors intend to do in respect of their own beneficial holdings of Premier’s shares, representing approximately 0.12 per cent of the existing share capital of Premier as at 5 October 2020, being the last practicable date prior to publication of this announcement.

Roy Franklin, Chairman of Premier, commented:

“The Board intends to recommend unanimously this transaction to shareholders as being in the best interests of shareholders and the company. This will mark a new and exciting chapter in Premier’s history.”

Tony Durrant, CEO of Premier, commented:

“There is significant industrial, commercial and financial logic to creating an independent oil and gas company of this size with a leading position in the UK North Sea. The transaction will also provide the Combined Group with a solid foundation from which to pursue a fully funded international growth strategy.”

Linda Cook, CEO of Harbour, commented:

“This transaction is the next step in Harbour’s aspiration to develop a new independent E&P company with global relevance. It significantly advances our leading position in the North Sea, where we will continue to re-invest, and expands our geographic footprint to Asia and Latin America. We are excited by the Premier assets in these regions and view them as the foundations upon which to build material portfolios and further diversify the company.”

Phil Kirk, CEO of Chrysaor, commented:

“Through this deal we will become the UK’s largest London-listed independent E&P, by all key metrics. With our combined organisation and operatorship of a large part of our now international portfolio, we will have the ability to deliver value safely, and play our part in the energy transition.”
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Chevron Completes Acquisition of Noble Energy

SAN RAMON, Calif., October 5, 2020 — Chevron Corporation (NYSE: CVX) announced today that its acquisition of Noble Energy, Inc. (NASDAQ: NBL) has been completed following approval by Noble Energy shareholders.

“We are pleased to welcome Noble Energy’s employees and shareholders to Chevron. Noble’s high-quality assets complement Chevron’s advantaged upstream portfolio, and the combination is expected to deliver strong financial benefits,” said Chevron Chairman and CEO Michael Wirth. “With an industry-leading balance sheet and a track record of capital discipline, we believe we’re in a different place than others and can protect the dividend while driving long-term value.”
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Image

Chevron Corporation, the multinational energy firm, said Monday it had entered into a definitive agreement with Noble Energy, Inc. to buy all of the outstanding shares of the Houston, Texas-based oil and gas explorer, in an all-stock transaction valued at $5 billion, or $10.38 per share.

The deal was first reported by the Wall Street Journal on Monday. Based on Chevron’s closing price on July 17, 2020, and under the terms of the agreement, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. The total value of the deal, including debt, is $13 billion, Chevron said. The price of the deal represents a 7.6 percent premium to Noble’s closing price on Friday of $9.65.

The acquisition makes it the largest tie-up in the oil industry since the start of the coronavirus pandemic that triggered a plunge in prices in the industry, the Wall Street Journal said.

The acquisition of Noble Energy provides Chevron with “low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio,” Chevron said in the statement. “Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean.”

The deal will also enhance Chevron’s position in the US.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Pioneer Natural Resources to Buy Parsley Energy for $4.5 Billion

Pioneer Natural Resources Co has agreed to buy Parsley Energy Inc. for $4.5 billion, the latest in a flurry of U.S. oil tie-ups as companies seek to weather low prices brought about by the coronavirus pandemic.

The all-stock deal, which values Parsley at a 7.9% premium to its closing value Monday, would solidify Pioneer’s place as one of the largest producers in the Permian Basin of Texas and New Mexico, the top American oil field.

The long-anticipated string of transactions is expected to continue for healthier companies in the country’s most prolific oil fields, investors said, while many smaller, debt-burdened companies that are hoping for a deal may draw few offers.

Pioneer Chief Executive Scott Sheffield said in an interview Tuesday that size and scale would be key to surviving as an independent oil-and-gas producer as the world moves away from fossil fuels, and would help his company return more cash to shareholders. But he said additional combinations of industry players may take time.

“I do not see much more coming until these other companies can deliver with excess cash flow over the next two or three years,” he said.

The Wall Street Journal reported Monday that Pioneer and Parsley were in talks to combine. Shares in Parsley increased about 5% on Tuesday, as Pioneer’s stock fell around 4%.

“The combination of Parsley and Pioneer creates an organization set to thrive as we forge a strong new link at the low end of the global cost curve,” Parsley Chief Executive Matt Gallagher said in a statement. He is poised to join the combined company’s board of directors

The deal comes a day after ConocoPhillips agreed to buy Concho Resources Inc. for $9.7 billion. Last month, Devon Energy Corp. agreed to a $2.6 billion merger with WPX Energy Inc., while Chevron Corp. in July agreed to buy Noble Energy Inc. for about $5 billion. All of them were all-stock deals with premiums of 15% or below.

The targets are among a relatively small group of U.S. oil-and-gas companies considered healthy enough financially to attract buyers, investors said.

Only about a quarter of major U.S. shale operators were attractive acquisition or merger targets based on their financial and operational strength, the Deloitte consulting firm said in a recent report. Less-attractive possibilities made up about half of the sector and a significant portion of U.S. oil and gas production. Deloitte deemed the rest as either risky investments or attractive largely to private-equity firms.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Cenovus and Husky Combine to Create a Resilient Integrated Energy Leader
Oct 25, 2020 6:30 ET

Combination of complementary businesses will result in $1.2 billion in cost and capital synergies, enhance free funds flow generation and support investment grade credit profile

CALGARY, Alberta, Oct. 25, 2020 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) and Husky Energy Inc. (TSX: HSE) today announced a transaction to create a new integrated Canadian oil and natural gas company with an advantaged upstream and downstream portfolio that is expected to provide enhanced free funds flow generation and superior return opportunities for investors.

The companies have entered into a definitive arrangement agreement under which Cenovus and Husky will combine in an all-stock transaction valued at $23.6 billion, inclusive of debt. The combined company will operate as Cenovus Energy Inc. and remain headquartered in Calgary, Alberta. The transaction has been unanimously approved by the Boards of Directors of Cenovus and Husky and is expected to close in the first quarter of 2021.

Transaction highlights:
  • Accretive to all shareholders on cash flow and free funds flow per share
  • Anticipated annual run rate synergies of $1.2 billion, largely achieved within the first year, independent of commodity prices
  • Expected free funds flow break-even at West Texas Intermediate (WTI) pricing of US$36 per barrel (bbl) in 2021, and at less than WTI US$33/bbl by 2023
  • Low exposure to Western Canadian Select (WCS) locational differential risk while maintaining healthy exposure to global commodity prices
  • Increased and more stable cash flows support investment grade credit profile
  • Net-debt-to-adjusted-EBITDA ratio of less than 2x expected to be achieved in 2022
  • Anticipated quarterly dividend of $0.0175 per share (upon Board approval) and positioned for consistent growth
  • Husky shareholders will receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share
Highly Complementary Integrated Portfolio

The combination has low exposure to Alberta oil pricing while maintaining healthy exposure to global commodity prices. It will unlock market opportunities by uniting high-quality and low-cost oil sands and heavy oil assets with extensive midstream and downstream infrastructure, creating a global competitor able to optimize margin capture across the heavy oil value chain.

“We will be a leaner, stronger and more integrated company, exceptionally well-suited to weather the current environment and be a strong Canadian energy leader in the years ahead,” said Alex Pourbaix, Cenovus President and Chief Executive Officer. “The diverse portfolio will enable us to deliver stable cash flow through price cycles, while focusing capital on the highest-return assets and opportunities. The combined company will also have an efficient cost structure and ample liquidity. All of this supports strong credit metrics, accelerated deleveraging and an enhanced ability for return of capital to shareholders.”

The combined company will be the third largest Canadian oil and natural gas producer, based on total company production, with about 750,000 barrels of oil equivalent per day (BOE/d) of low-cost oil and natural gas production, including 50,000 BOE/d of high free funds flow generating offshore Asia Pacific production. It will be the second largest Canadian-based refiner and upgrader, with total North American upgrading and refining capacity of approximately 660,000 barrels per day (bbls/d), which includes approximately 350,000 bbls/d of heavy oil conversion capacity. The company will have access to about 265,000 bbls/d of current takeaway capacity out of Alberta on existing major pipelines, as well as about 305,000 bbls/d of committed capacity on planned pipelines. In addition, it will have 16 million barrels of crude oil storage capacity as well as strategic crude-by-rail assets that provide takeaway optionality.

Rob Peabody, Husky President and Chief Executive Officer, said, “Bringing our talented people and complementary assets together will enable us to deliver the full potential of this resilient new company. The integration of Cenovus’s best-in-class in situ oil sands assets with Husky’s extensive North American upgrading, refining and transportation network and high netback offshore natural gas production, will create a low-cost competitor and support long-term value creation.”

The transaction will result in processing capacity and egress out of Alberta for the majority of the combined company’s oil sands and heavy oil production. The company will have opportunities for margin enhancement through strategically located upstream assets integrated with the upgrading complex at Lloydminster, Saskatchewan, large U.S. refining assets in PADD 2 and PADD 3, and storage and blending operations at Hardisty, Alberta. The integration of Cenovus’s upstream assets with Husky’s downstream and midstream portfolio will also shorten the future value chain and reduce condensate costs associated with heavy oil transportation. Cash flow stability is further underpinned by the global exposure of Husky’s offshore Asia Pacific natural gas production interests, which currently generate approximately $1 billion in annual free funds flow through sales largely under long-term contracts.

Strategic and Financial Benefits of the Combination

Cenovus and Husky combined are expected to be stronger, more competitive, efficient and profitable than either company on its own.

Immediate and tangible savings and improved capital allocation opportunities

The combined company is expected to generate an incremental $1.2 billion of annual free funds flow, comprised of $600 million in annual corporate and operating synergies and $600 million in annual capital allocation synergies, achievable independent of commodity prices. These synergies are the product of a rigorous and disciplined evaluation process conducted by Cenovus and Husky over the past months to identify the specific efficiencies that can be gained through this transaction. The vast majority of the annual savings are anticipated to be achieved in the first year of combined operations, with the full amount of the annual run rate synergies realized within year two. The companies anticipate additional future savings based on opportunities for further physical integration of the upstream and downstream heavy oil assets.

The anticipated $600 million in annual corporate and operating cost synergies will be achieved through reductions to combined workforce and corporate overhead costs including streamlined IT systems and procurement savings through economies of scale. Immediate efficiencies are also expected to be realized by implementing best practices from each company, including applying Cenovus’s operating expertise to Husky’s oil sands assets, leveraging the increased portfolio’s scale in the Deep Basin, and pursuing commercial and contract-related efficiencies on midstream marketing and blending opportunities.

The expanded portfolio will enable more efficient, returns-focused capital allocation. The company is expected to sustain production levels and downstream operations with an anticipated annual capital investment of $2.4 billion, a reduction of more than $600 million per year compared with what would be required by the two companies on a standalone basis. The estimated proved reserves life of about 33 years, consisting mostly of very low-cost reserves, is expected to result in reduced re-investment risk and eliminate the need for future large-scale capital projects to sustain production at current levels.

Enhanced free funds flow generation and investment grade metrics

The combined company is expected to be free funds flow breakeven in 2021 at WTI prices of US$36/bbl, with a line of sight to reducing its free funds flow breakeven to less than WTI US$33/bbl by 2023. This is lower than either company on a standalone basis.

The company’s priority will be to maximize free funds flow by focusing investments on sustaining capital expenditures. In the current environment, free funds flow generation will position the combined company to achieve a net-debt-to-adjusted-EBITDA target of less than 2x in 2022, without the need for asset dispositions. Along with the combined entity’s lower free funds flow breakeven threshold, the combined company will offer an accelerated deleveraging capability relative to either company on a standalone basis.

The funds flow profile of the combined company supports investment grade credit metrics and a lower cost of capital through the commodity price cycle. At closing, the combined company is expected to have ample liquidity with $8.5 billion in undrawn committed credit facilities and no bond maturities until 2022.

After achieving its balance sheet objectives, the company expects to generate sufficient free funds flow to be able to consider sustainable growth in shareholder distributions and a returns-focused organic capital investment program with residual free funds flow. Following the close of the transaction, Cenovus is anticipating the Board’s approval of a quarterly dividend of $0.0175 per share.

Uncompromising Commitment to Safety and Sustainability Leadership

The commitments both Cenovus and Husky have made to world-class safety performance and environmental, social and governance (ESG) leadership will remain core to the combined company. This includes ambitious ESG targets, robust management systems and transparent performance reporting. The company will continue working to earn its position as a global energy supplier of choice by advancing clean technology and reducing emissions intensity. This includes maintaining the ambition established by each company independently of achieving net zero emissions by 2050. Cenovus will also make it a priority to continue building upon the strong local community relationships already established by both companies, with a focus on Indigenous economic reconciliation.

The targets Cenovus and Husky released earlier this year for their key ESG focus areas are the products of robust processes to ensure alignment with the companies’ business plans and strategies. Cenovus remains committed to pursuing ESG targets and will undertake a similarly thorough analysis before setting meaningful targets for the new portfolio. Once that work is complete in 2021 and approved by the Board, the new targets and plans to achieve them will be disclosed. Leading safety practices, strong governance and advancing diversity and inclusion will remain central to the company’s ESG commitments.

Management and Board Leadership – Committed to Successful Integration

The combined company will be led by a proven management team reflecting the strengths of both organizations, with a track record of strong safety performance, operational excellence and cost and capital discipline, along with downstream and midstream expertise. Alex Pourbaix will serve as Chief Executive Officer of the combined company, Jeff Hart will serve as Chief Financial Officer, Jon McKenzie will serve as the Chief Operating Officer and Keith MacPhail will serve as independent Board Chair.

Additional senior executives for the combined company will be selected from top talent at both companies and named by the close of the transaction.

The management team will be complemented by a Board of Directors consisting of eight directors identified by Cenovus and four directors identified by Husky.

Transaction Details and Governance

Under the terms of the definitive agreement, Husky shareholders will receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share. This represents a 21% premium, excluding warrants, relative to Husky’s five-day volume-weighted average price per share as at October 23, 2020. Including the warrants, the premium is 23%. While the transaction was originally conceived as an at-market merger, resulting in a negotiated proportionate ownership level, the respective share values have diverged during the due diligence period over the past months. This resulted in a premium for Husky shareholders based on the current share prices.

Each whole warrant will entitle the holder to acquire one Cenovus common share for a period of five years following the completion of the transaction at an exercise price of $6.54 per share. Assuming the full exercise of such warrants, the combined company would receive approximately $428 million in cash proceeds. The aggregate consideration package for Husky shareholders implies a transaction equity value for Husky of approximately $3.8 billion, and a transaction enterprise value for Husky of approximately $10.2 billion.

The transaction is structured through a plan of arrangement in respect of the securities of Husky under the Business Corporations Act (Alberta), and is subject to the approval of at least two-thirds of the votes cast by holders of Husky common shares. Hutchison Whampoa Europe Investments S.à r.l., which holds 40.19% of the Husky common shares and L.F. Investments S.à r.l., which holds 29.32% of the Husky common shares, have each entered into a separate irrevocable voting support agreement with Cenovus pursuant to which each has committed to vote all of its Husky common shares, representing, in total, approximately 70% of the Husky common shares, in favour of the transaction at the special meeting of Husky shareholders. In addition, Husky will also seek the approval of at least two-thirds of the votes cast by holders of outstanding Husky preferred shares voting together as a single class. If Husky preferred shareholder approval is obtained, each Husky preferred share will be exchanged for one Cenovus preferred share with substantially the same commercial terms and conditions as the Husky preferred shares. The transaction is not conditional on Husky preferred shareholder approval and, if not obtained, the Husky preferred shares will remain outstanding in a subsidiary of the combined company.

The issuance of Cenovus common shares, warrants exercisable for Cenovus common shares and, if applicable, Cenovus preferred shares pursuant to the transaction is subject to the approval by a majority of the votes cast by holders of Cenovus common shares at a special meeting of Cenovus shareholders.

Immediately following the close of the transaction, and prior to the exercise of any warrants issued to Husky shareholders as part of this transaction, Cenovus shareholders will own approximately 61% of the combined company, and Husky shareholders will own approximately 39%. Immediately following the close of the transaction, Hutchison Whampoa Europe Investments S.à r.l. and L.F. Investments S.à r.l. will respectively hold approximately 15.7% and 11.5% of the combined company.

“Cenovus is pleased to have Husky’s significant shareholders, with their strong ties to Canada, exceptional business capabilities and knowledge of Asia and Husky’s Asian assets in particular, become one of our long-term shareholders,” said Pourbaix. “We value the perspectives they will provide as highly successful international investors.”

In addition to the voting support agreements, Hutchison Whampoa Europe Investments S.à r.l. and L.F. Investments S.à r.l. have also each entered into a separate standstill agreement with Cenovus, taking effect at closing, under which they will each be subject to certain voting requirements, transfer restrictions and other standstill restrictions for a maximum term of five years following completion of the transaction. All other shareholders holding 5% or more of the combined company at closing of the transaction that do not have existing similar rights, will also be provided with customary registration and pre-emptive rights upon request.

The Board of Directors of each of Cenovus and Husky have unanimously approved the arrangement agreement and support the transaction. Details of the transaction will be included in a joint information circular that Cenovus and Husky expect to mail to their respective shareholders by mid-November. The special shareholder meetings of both companies are expected to be held in December.

In addition to shareholder approvals, the transaction is subject to regulatory approvals, as well as the approval of the Court of Queen’s Bench of Alberta.

The transaction is expected to close in the first quarter of 2021.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

OMV and Mubadala complete Borealis transaction
  • OMV acquires additional 39% stake from Mubadala, increasing its shareholding in Borealis to 75%
  • Purchase price of USD 4.68 bn
  • Net cash out for OMV is EUR 3.8 bn
  • Mubadala retains a 25% interest in Borealis
OMV, the international integrated oil and gas company headquartered in Vienna and Mubadala Investment Company, the Abu Dhabi-based strategic investment company, have today completed the transaction for OMV to acquire an additional 39% stake in Borealis, a leading, global chemicals company, from Mubadala.

Following the initial agreement announced in March this year, the transaction was completed in line with the expected timeline and in accordance with all regulatory requirements. OMV now holds a 75% interest in Borealis and Mubadala retains a 25% interest in the company.

OMV is entitled to all dividends in relation to the additional shares in Borealis distributed after December 31, 2019. OMV will fully consolidate the results of Borealis in its financial statements. In 2019, Borealis generated total sales of EUR 9.8 bn and a net profit of EUR 872 mn. The operating cash flow of Borealis – including dividends from its joint venture Borouge –amounted to EUR 1.5 bn in 2019. In the first nine months of 2020, Borealis achieved an operating cash flow including Borouge dividends of EUR 1.1 bn, 6 percent higher than the same period of last year, despite the difficult market environment due to the COVID-19 pandemic.

Musabbeh Al Kaabi, CEO, Petroleum & Petrochemicals, Mubadala Investment Company: “This transaction is well aligned with our strategy as a responsible investor and we are confident in the value this partnership will create for all three companies. Both OMV and Borealis are champions of the Mubadala portfolio, and this decision is consistent with our asset management model and our commitment to partner with like-minded players.”

Rainer Seele, Chairman of the OMV Executive Board and CEO: “This transaction is another milestone in the implementation of our strategy. We are thus establishing an integrated and sustainable business model extending OMV’s value chain towards higher value chemical products and recycling, thereby repositioning the Group for a lower carbon future.”

The purchase price of the transaction amounts to USD 4.68 bn. Based on closing adjustments, the cash-out for OMV, net of cash acquired, is EUR 3.8 bn. The adjustments include the first quarter dividends to which OMV is entitled based on the increased shareholding, currency effects, and the cash position of Borealis at closing. Following the successful issuance of senior and hybrid bonds of EUR 4.5 bn Euros, OMV paid the entire amount in full at closing. As a result of the synergies identified in the last few months, OMV is increasing the synergy potential from EUR 700 mn to more than EUR 800 mn. In addition, OMV has successfully started its divestment program, which will realize EUR 2 bn by the end of 2021. The sale of the 51-percent share in OMV’s gas logistics subsidiary Gas Connect Austria has already been signed and will have a deleveraging effect of EUR 570 million for OMV.

With its head office in Vienna, Borealis currently has more than 6,800 employees and operates in over 120 countries. The company provides services and products to customers globally, both directly and in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC) and with Baystar™, a joint venture with Total in Texas, USA.

Global demand for monomers and polymers is growing rapidly. The purchase of a controlling majority in Borealis makes OMV a leading provider of polyolefins and base chemicals. The joint production capacities make OMV and Borealis the number one producer of ethylene and propylene in Europe and one of the top 10 polyolefin producers worldwide. The acquisition is a strategic extension of OMV’s value chain into high value chemicals. This provides a natural hedge against the cyclicality of each value chain step with respect to both volumes and market spreads, de-risking OMV’s exposure to volatile markets.

Furthermore, OMV and Borealis will jointly expand their know-how and activities in the plastics circular economy. Borealis’ activities in plastics recycling, through its subsidiaries EcoPlast (Austria) and mtm plastics (Germany), Project STOP (Ocean Waste) and the Design For Recycling (DFR) initiative are a perfect addition to OMV’s ReOil® technology for the chemical recycling of post-consumer-plastic. The proprietary ReOil® technology converts hard-to-recycle plastic waste into high-quality feedstock for its refineries, substituting the need crude oil.

Background information:

OMV Aktiengesellschaft

OMV produces and markets oil and gas, innovative energy and high-end petrochemical solutions – in a responsible way. With Group sales of EUR 23 bn and a workforce of around 20,000 employees in 2019, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies. In Upstream, OMV has a strong base in Central and Eastern Europe as well as a balanced international portfolio, with Middle East & Africa, the North Sea, Russia and Asia-Pacific as further core regions. Daily average production was 487,000 boe/d in 2019. In Downstream, OMV operates three refineries in Europe and owns a 15% share in ADNOC Refining and Trading JV, with a total annual processing capacity of 24.9 mn tons. Furthermore, OMV has a 75% participation in Borealis, one of the world’s leading producers of polyolefins. The Company operates about 2,100 filling stations in ten European countries. OMV runs gas storage facilities in Austria and Germany. In 2019, gas sales volumes amounted to around 137 TWh. Sustainability is an integral part of OMV’s corporate strategy. OMV supports the transition to a lower-carbon economy and has set measurable targets for reducing carbon intensity and introducing new energy and petrochemical solutions.

About Mubadala Investment Company

Mubadala Investment Company is a sovereign investor managing a global portfolio, aimed at generating sustainable financial returns for the Government of Abu Dhabi. Mubadala’s $232 billion (AED 853 billion) portfolio spans six continents with interests in multiple sectors and asset classes. We leverage our deep sectoral expertise and long-standing partnerships to actively source deals. In the UAE, we are driving sustainable growth by optimizing scale and efficiency, supporting the continued diversification and global integration of the local economy while growing our shareholder value. Headquartered in Abu Dhabi, Mubadala has offices in London, Rio de Janeiro, Moscow, New York, San Francisco and Beijing.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Chevron Announces Agreement to Acquire Noble Midstream Partners
  • Simplifies governance and corporate structure
  • Enables further integration in support of leading DJ & Permian positions
  • Transaction expected to close in 2Q 2021
SAN RAMON, Calif., March. 5, 2021 – Chevron Corporation (NYSE: CVX) (“Chevron”) and Noble Midstream Partners, LP (NASDAQ: NBLX) (“Noble Midstream”) announced today that they have entered into a definitive agreement for Chevron to acquire all (33.925 million) of the publicly held common units representing the limited partner interests in Noble Midstream, not already owned by Chevron and its affiliates (the “Common Units”), in an all-stock transaction whereby each outstanding unitholder of Noble Midstream would receive 0.1393 of a share of common stock of Chevron in exchange for each Common Unit owned.

“We believe this buy-in transaction is the best solution for all stakeholders, enabling us to simplify the governance structure and capture value in support of our leading positions in the DJ and Permian basins,” said Colin Parfitt, Vice President of Chevron Midstream and Chairman of the Board of Directors (the “Board”) of the general partner of Noble Midstream Partners LP.

The Conflicts Committee of the Board, comprised entirely of independent directors, after consultation with its independent legal and financial advisors, unanimously approved the merger. Subsequently, the merger was approved by the Board.

The transaction is expected to close in the second quarter of 2021, subject to customary approvals. A subsidiary of Chevron, as the holder of a majority of the outstanding Common Units, has voted its units to approve the transaction.

Advisors

Citi is acting as financial advisor and Latham & Watkins LLP is acting as legal advisor to Chevron. Janney Montgomery Scott is acting as financial advisor and Baker Botts L.L.P. is acting as legal advisor to the Conflicts Committee of the Board.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

NOBLE CORPORATION AND PACIFIC DRILLING ANNOUNCE AGREEMENT TO COMBINE

Image

SUGAR LAND, Texas and HOUSTON, March 25, 2021 /PRNewswire/ -- Noble Corporation ("Noble") and Pacific Drilling Company LLC ("Pacific Drilling") announced today that they have entered into a definitive merger agreement under which Noble will acquire Pacific Drilling in an all-stock transaction. The definitive merger agreement was unanimously approved by each company's Board of Directors. The transaction has also been approved by a majority of Pacific Drilling's equity holders, and no shareholder vote is required for Noble to close the transaction. As part of the transaction, Pacific Drilling's equity holders will receive 16.6 million shares of Noble, or approximately 24.9% of the outstanding shares of Noble at closing. Noble expects to realize annual pre-tax cost synergies of at least $30 million, and additionally, will move to dispose of the Pacific Bora and Pacific Mistral expeditiously. The transaction is subject to customary closing conditions and is expected to be completed in April 2021.

Noble's President and Chief Executive Officer, Robert Eifler, said, "The acquisition of Pacific Drilling will enhance our position in the ultra-deepwater market through the addition of its technologically-advanced ultra-deepwater drillships, which are highly complementary to Noble's existing fleet. By bringing these modern drillships into the Noble fleet, we will be able to better serve the needs of our customers globally and to participate in a wider range of drillship tender activity. The combination brings together two companies who share a common culture prioritizing safety and operational excellence. Additionally, the acquisition expands and further solidifies our relationship with certain key customers, facilitates re-entry into both the West African and Mexican regions, and strengthens our presence in the US Gulf of Mexico."

Mr. Eifler continued, "This acquisition is a positive strategic step for Noble, and we will work expeditiously to close the transaction and integrate the two companies. We remain committed to generating shareholder value through safety and operational excellence, capital discipline and customer satisfaction. As the offshore drilling landscape evolves, we look forward to maintaining our leadership role as we continue to grow in concert with the needs of our customers."

Bernie Wolford, Pacific Drilling's Chief Executive Officer, stated, "Bringing together the Pacific Drilling and Noble fleets creates a stronger and more stable combined company with the scale to provide solutions for our clients on a global basis. This combination will advance the ongoing recovery in the industry and will allow Pacific Drilling equity holders to fully participate in that recovery. I would like to personally thank the entire Pacific Drilling team for their unwavering commitment to delivering safe, efficient and reliable services to our customers, and we look forward to working with Noble to successfully integrate the two companies."

Significant Value Creation Potential for Noble Shareholders and Pacific Drilling Equity Holders
  • Pacific Drilling's high specification UDW drillships are complementary to Noble's high specification fleet: The combined fleet will be one of the youngest and most technologically advanced fleets in the industry. The complementary nature of both drillship fleets will permit sharing of expertise, capital spares and equipment across the rigs. For example, both companies utilize the same original equipment manufacturers for engines, thrusters, well control and drilling equipment.
  • Shared culture and commitment to operational excellence: Noble and Pacific Drilling both operate with a commitment to best-in-class safety performance and environmental stewardship. A key component of both companies' value proposition also includes delivering the most efficient and reliable drilling performance to the customer.
  • Expansion of Noble's customer relationships and geographic footprint: The acquisition facilitates Noble's reentry into the growing West Africa and Mexico regions, and broadens its customer relationships. Given Noble's fully contracted drillship fleet, these additional assets will also allow participation in key drillship tendering activity.
  • Meaningful cost synergies: Noble expects to realize annual pre-tax cost synergies of at least $30 million, with the full amount of cost synergies being realized by the end of 2021.
  • Strengthens balance sheet: Pacific Drilling will be acquired on a debt free basis and with approximately $30 million of anticipated cash and cash equivalents, after adjusting for certain anticipated transaction related expenses. Noble remains committed to maintaining a conservative balance sheet.
Noble – Customer Focused, Global Provider of High-Specification RigsPro forma for the acquisition, Noble will own and operate a high specification fleet of 24 rigs, with 11 drillships, 1 semisubmersible, and 12 jackups. Additionally, Noble will have pro forma backlog of approximately $1.7 billion, split across a diverse set of customers and regions of operation. Noble remains focused on serving the needs of its customers and delivering best-in-class operational excellence that is consistent across all geographies.

No changes to Noble's Board of Directors or executive management team are anticipated as a result of the acquisition. Noble will continue to have its principal executive offices in Sugar Land, Texas.

AdvisorsDucera Partners LLC and DNB Markets, a part of DNB Bank ASA, are acting as financial advisors, and Kirkland & Ellis LLP is acting as legal advisor to Noble.

Houlihan Lokey Capital, Inc. is acting as financial advisor and Akin Gump Strauss Hauer & Feld LLP is acting as legal advisor to Pacific Drilling.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Delmar Systems Acquires Vryhof

Image

HOUSTON, TX. – Delmar Systems, Inc. is pleased to announce the acquisition of Vryhof, consisting of Deep Sea Mooring and Vryhof Anchors. The combined company, with its global footprint and enhanced asset portfolio, will continue as Delmar Systems and as Vryhof.

“We are excited to welcome Vryhof to the Delmar family. Vryhof’s Team has built a world-class organization and we look forward to continuing that tradition,” says Nick Patterson, Delmar’s CEO. “With over a century of combined company experience, Delmar and Vryhof will offer unrivalled personnel, equipment, engineering, mooring solutions and comprehensive project management to the global offshore energy industry.”

“We are pleased to have reached this agreement with Delmar. This transaction is in line with our strategy to divest capital-intensive businesses to allow us to focus our energy on transition and growth plans,” commented Jan Erik Rugland, Moreld’s COO, the former owner of Vryhof.

“Delmar is a great home for our companies. The combination of the individual strengths and complementary offerings of the companies will be a key benefit to our mutual and new customers,” explained Wolfgang Wandl, Vryhof’s CEO. “Our dedicated professionals look forward to continuing the tradition of providing the very best service and quality that has led to our global success. Together we will pursue the same objectives and ambitions to foster a collective sense of pride in a successful Delmar Systems and Vryhof.”
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Keppel jumps, Sembcorp Marine tumbles as trading resumes after news of O&M merger talks

Image

25 June 2021 (https://www.straitstimes.com/business/c ... news-of-om)

SINGAPORE - The share prices of Keppel Corp and Sembcorp Marine (Sembmarine) went in different directions when trading in the stocks resumed on Friday morning (June 25), after the two announced talks to explore a potential combination of their offshore and marine (O&M) businesses.

Keppel shares jumped 29 cents or 5.4 per cent to $5.40 at 9.04am, from their close on Wednesday, while Sembmarine fell 4.6 cents or 24 per cent to 14.5 cents. The companies had halted trading on Thursday.

At 9.40am, Keppel extended its gains, trading up 6.3 per cent at $5.43. Sembmarine, the most heavily traded stock by volume, was down 18.9 per cent at 1.55 cents, with 319,000 shares trading hands.

The two companies on Thursday signed a non-binding agreement to enter into exclusive talks with the aim of merging Keppel's offshore and marine arm (Keppel O&M) and Sembmarine. This is intended to create a combined entity that is better positioned to compete for contracts in offshore renewable energy.

The move comes amid an extended period of low oil prices and persistent disruptions in the oil and gas sector, such as manpower shortages and reductions in demand for rigs by oil majors.

If a merger ensues, Keppel says it expects to receive shares in the combined entity, which will remain listed on the Singapore Exchange. Keppel intends to distribute all these shares to its shareholders. It will also receive cash totalling $500 million.

Meanwhile, in a move expected to immediately depress Sembmarine's shares from the dilution effect, the company separately announced on Thursday it will seek fresh funds via a fully underwritten $1.5 billion renounceable rights issue. In September last year, Sembmarine raised $2.1 billion in a similar exercise following its demerger from Sembcorp Industries.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Keppel Corporation signs non-binding MOUs in connection with proposed combination of Keppel O&M and Sembcorp Marine
  • Proposed transactions, if successfully completed:
  1. Will create a stronger player in the offshore & marine sector, and provide a solution for Keppel O&M’s legacy assets, which will be monetised over time.
  2. Are expected to be earnings accretive to Keppel Corporation for the current financial year on a pro forma basis
  • If successfully completed, Keppel Corporation will receive shares in the Combined Entity and a cash consideration.
  • Keppel Corporation intends to distribute to shareholders all the Combined Entity shares that it receives by way of distribution in specie.
Keppel Corporation Limited (Keppel) announced today that it has signed a non-binding Memorandum of Understanding (MOU) with Sembcorp Marine Ltd (Sembcorp Marine) to enter into exclusive negotiations with a view to combining Keppel Offshore & Marine (Keppel O&M) and Sembcorp Marine (the Combined Entity).

Keppel has also signed a non-binding MOU with Kyanite Investment Holdings Pte Ltd (Kyanite), a wholly owned subsidiary of Temasek, with a view to sell Keppel O&M’s legacy completed and uncompleted rigs and associated receivables to a separate Asset Co, which would be majority owned by external investors.

These two proposed transactions will be inter-conditional and pursued concurrently.

The transactions are in line with Keppel’s Vision 2030 plans to be more focused and disciplined as it executes its mission to provide solutions for sustainable urbanisation. The proposed transactions, together with Keppel’s increasing focus on renewables, will accelerate the Group’s pivot towards new energy and decarbonisation solutions.

The Combined Entity will be better positioned to capitalise on the energy transition including areas such as offshore wind and address the opportunities and challenges in the evolving and consolidating offshore & marine industry.

If the proposed transaction is successfully completed, the Combined Entity will be a listed entity and Keppel will receive shares in the Combined Entity and a cash consideration of up to S$500 million. Keppel intends to distribute to its shareholders all the Combined Entity shares that it receives, thus allowing shareholders to enjoy the upside from (i) synergies created through resource optimisation and capital allocation and (ii) the recovery of the O&M business and the opportunities in the energy transition, through their stakes in the strengthened Combined Entity.

The key terms of the transaction are under discussion, and the shareholding of the Combined Entity is subject to negotiation, due diligence and detailed valuation to be performed by Keppel, Sembcorp Marine and their respective advisers.

Keppel O&M’s interests in Floatel International Ltd and Dyna-Mac Holdings Ltd as well as Keppel O&M’s legacy completed and uncompleted rigs and associated receivables will be excluded from the combination. Keppel O&M’s interests in Floatel International Ltd and Dyna-Mac Holdings Ltd will be retained by Keppel Corporation.

Under the second MOU, Keppel O&M’s legacy rigs and associated receivables will be sold to a separate Asset Co that will be formed. Keppel will retain not more than a 20% stake in Asset Co as an investment, while external investors, which Kyanite intends to procure, will hold the balance of at least 80%. Keppel will receive the consideration for the legacy rigs and associated receivables substantially in the form of credit notes. Asset Co shall be independently managed from the Combined Entity and the General Partner of this Asset Co will maintain, complete and monetise the rigs over time. Asset Co will enter into a service agreement with the Combined Entity for the completion of certain uncompleted rigs and the provision of other services.

The external investors will provide capital which can be used for finishing these uncompleted rigs, which would no longer be funded by Keppel. Keppel’s economic exposure in Asset Co will be reduced over time, as the rigs or Asset Co are sold or securitised when conditions in the rig chartering market improve.

Under the MOU between Keppel and Sembcorp Marine, it is envisaged that Keppel and the Combined Entity will enter into a strategic partnership, pursuant to which Keppel will hold 50% of a 50-50 joint venture that will be established between Keppel and the Combined Entity (Strategic Partnership JV). This would allow Keppel to continue accessing Keppel O&M’s capabilities required for its projects, on terms to be agreed. The scope of the Strategic Partnership JV will be subject to final agreement between the parties concerned. In addition, subject to regulatory review, the Combined Entity will be the preferred EPC partner for Keppel’s projects where the Combined Entity has the relevant expertise.

Mr Loh Chin Hua, CEO of Keppel Corporation said, “Over the past few decades, Keppel has been regularly transforming itself to stay competitive and seize new opportunities. As part of Vision 2030, we have announced that we are sharpening our focus, and working towards being one integrated business, providing solutions for sustainable urbanisation, and focused on four business segments: Energy & Environment, Urban Development, Connectivity and Asset Management. The proposed restructuring will allow us to further enhance the alignment and synergy across our business segments, as we focus on realising Vision 2030. Together with the planned divestment of our logistics business, Keppel will be much more streamlined, asset-light and focused in the execution of our mission. We will accelerate the Group’s growth in areas such as smart cities, renewables, environmental solutions, connectivity and asset management, and work towards our target ROE of 15%.”

Mr Loh continued, “Keppel started out more than five decades ago as a small ship repair yard. We are very proud of our O&M heritage and business, which had yielded almost S$8 billion in net profits for the Group over the decade from 2006-2015. The proposed combination would create a stronger player that can compete more effectively. It builds on the organic transformation of Keppel O&M, which we had announced at the start of the year, to enhance its competitiveness and relevance in the evolving international landscape. If the proposed transactions are successfully completed, it is intended that shareholders of Keppel Corporation will receive in specie all of the Combined Entity shares received by the Company and can continue to benefit from growth opportunities in the O&M business as the sector recovers.”

“Notwithstanding the proposed combination, Keppel will continue to retain the core engineering, project management and operations and maintenance capabilities we would need to seize opportunities in our chosen areas of business. Through the Strategic Partnership JV, we will also continue to have access to Keppel O&M’s capabilities, intellectual property and technology in areas such as offshore renewables and nearshore developments, which will be within the Combined Entity.”

As part of the discussions on the Combined Entity, Keppel O&M will also engage with workplace unions to address labour considerations for the Combined Entity and to continue to attract, develop and retain O&M engineering talent for the Combined Entity.

The proposed transactions are expected to be earnings accretive to Keppel Corporation for the current financial year on a pro forma basis, although there is no anticipation that any transaction, if agreed, will complete this year. The Keppel Group’s net debt will fall as a result of the deconsolidation of Keppel O&M and the receipt of a part of the consideration from the Combined Entity in cash. The distribution in specie of shares in the Combined Entity will however reduce Keppel’s shareholders’ funds. Overall, the Group’s net gearing is not expected to be significantly affected following the transactions.

The proposed transactions are subject to among others, satisfactory due diligence, negotiation and execution of definitive agreements, relevant regulatory approvals and shareholders’ approval of the respective parties. There is no guarantee that a final agreement will be reached or that any transaction will materialise.

In the meantime, Keppel O&M will remain focused on executing and delivering its existing contracts and seizing new opportunities. Keppel will make the necessary announcements if and when there are material developments.

J.P. Morgan is the financial advisor to Keppel Corporation.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Swire Pacific Enters into Agreement for the Sale of Swire Pacific Offshore

09 Mar 2022

Swire Pacific Limited (the “Company”, together with its subsidiaries, the “Group”) announced that on 9th March 2022, Banyan Overseas Limited, a subsidiary of the Company, entered into a sale and purchase agreement with Tidewater Inc. (“Tidewater”), a company listed on the New York Stock Exchange (NYSE: TDW), for the sale of a 100% interest in Swire Pacific Offshore Holdings Limited (“Swire Pacific Offshore”), at a consideration of approximately US$190 million (the “Transaction”).

The consideration for the Transaction will be settled partly in cash and partly in the form of warrants issued by Tidewater which will entitle the Group to purchase 8.1 million shares of common stock of Tidewater at a nominal price. Completion of the Transaction is subject to satisfaction of conditions precedent set out in the definitive agreements.

Established in 1975, Swire Pacific Offshore is a wholly-owned subsidiary of the Company. Headquartered in Singapore, Swire Pacific Offshore owns and operates a fleet of specialist offshore support vessels servicing the energy industry in major offshore production and exploration regions. Tidewater owns and operates one of the largest fleets of offshore support vessels in the industry, with over 60 years of experience supporting offshore energy exploration and production activities worldwide.

After the Transaction, and the earlier sale of Hongkong United Dockyards (HUD), Swire Pacific will no longer operate any marine services business. The sale is in line with Swire Pacific’s strategy of reducing exposure to non-core assets and recycling capital to focus on core businesses that have strong growth opportunities in Greater China and South East Asia – including property, beverages, aviation and more recently, investments in the healthcare sector.

Guy Bradley, Chairman of Swire Pacific said, “We have taken great pride in the people and the safe and high quality operations of Swire Pacific Offshore since we invested in the business in 1975. The combined Tidewater / Swire Pacific Offshore business will create one of the world’s leading offshore marine companies that is well-positioned for growth in the offshore energy sector. I would like to thank all the staff at Swire Pacific Offshore for their dedication and contributions to the company over the years, and I wish them all the best in the future.”
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »



Ithaca Energy has agreed to acquire North Sea rival Siccar Point Energy ahead of its IPO. The consideration of the agreement includes an upfront payment of USD 1.1 billion and a series of contingent payments totalling a maximum of USD 360 million (USD 300 million linked to future developments and USD 60 million linked to short term realised commodity prices).

The Siccar Point team and Operatorship of key UK assets will transfer to Ithaca on closing of the deal, said Ithaca. The acquisition will also double Ithaca’s recoverable reserves and support production of at least 80,000 – 90,000 boe/d through the next decade, with the potential to increase this through further portfolio opportunities.

📸 Ithaca Energy
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Keppel Corporation signs definitive agreements in connection with proposed combination of Keppel O&M and Sembcorp Marine
  • Proposed combination will create a premier global player offering offshore renewables, new energy and cleaner solutions in the offshore & marine sector
  • Proposed transactions, estimated on a pro forma basis, will allow Keppel to realise approximately S$9.42 billion in value comprising:
- S$4.87 billion comprising 56% equity shares in the Combined Entity[1]
- Extraction of S$500 million in cash as part of Keppel O&M’s pre-combination restructuring; and
- S$4.05 billion[2] comprising vendor notes, perpetual securities and a 10% stake in Asset Co from the sale of Keppel O&M’s legacy rigs and associated receivables to Asset Co
  • 46% of equity shares in the Combined Entity will be distributed to Keppel shareholders
  • Proposed transactions are earnings accretive to Keppel Corporation for the financial year ended 2021 on a pro forma basis
  • Proposed transactions are aligned with Keppel’s Vision 2030 plans to simplify and focus the Group’s business as it executes its mission to provide solutions for sustainable urbanisation.
Keppel Corporation Limited (Keppel) announced today that it has entered into definitive agreements with Sembcorp Marine Ltd (Sembcorp Marine) for the proposed combination of Keppel Offshore & Marine and Sembcorp Marine (the Combined Entity), setting in motion the creation of a premier global player providing offshore renewables, new energy and cleaner solutions in the offshore & marine sector. The proposed combination will unlock synergies by bringing together the strong track records and capabilities of the two companies, putting the Combined Entity in a strong position to expand and compete more effectively in its areas of focus amidst the energy transition. It is also expected to further strengthen Singapore’s position as a maritime and offshore & marine hub.

Under the terms of the combination framework agreement between (amongst others) Keppel Corporation and Sembcorp Marine, the Group will receive equity shares representing a 56% equity interest in the Combined Entity (which will be listed as a separate listed entity) as well as cash of S$500 million. This values Keppel O&M, on a pro forma basis, at approximately S$4.87 billion, excluding (i) the extraction of the S$500 million cash, (ii) its interests in certain out-of-scope assets with a book value of approximately S$300 million as at 31 December 2021 (comprising mainly Floatel International Ltd and Dyna-Mac Holdings Ltd) which will be retained by Keppel Corporation, (iii) as well as the legacy rigs and their associated receivables which will be sold to Asset Co.

When the proposed combination is successfully completed, Keppel will distribute to its shareholders 46% of the equity shares in the Combined Entity, thus allowing shareholders to enjoy the upside from (i) synergies created through resource optimisation and capital allocation, and (ii) the recovery of the O&M business and the opportunities in the energy transition, through their stakes in the strengthened Combined Entity.

Keppel will deposit the remaining 10% of the Combined Entity’s shares into a segregated account for certain identified contingent liabilities. This segregated account will be terminated no later than 48 months from the completion of the proposed combination, or as soon as these contingent liabilities have either been dismissed or fully resolved and settled. The balance amount in the segregated account will then be returned to Keppel after making payments to the Combined Entity, if any. Similarly, the Combined Entity also undertakes to reimburse Keppel in cash for actual payments, if any, made in respect of certain identified contingent liabilities associated with Sembcorp Marine for a period of no more than 24 months from the completion of the proposed combination.

Keppel has concurrently signed a definitive agreement with Baluran Limited (Baluran), an indirect wholly-owned subsidiary of ASM Connaught House Fund V[3], and Kyanite Investment Holdings Pte Ltd (Kyanite), an indirect wholly-owned subsidiary of Temasek, for the sale of Keppel O&M’s legacy completed and uncompleted rigs and the receivables associated with certain legacy rigs to a separate Asset Co. Baluran and Kyanite (the external investors) will respectively own 74.9% and 15.1% of Asset Co. Keppel will hold a 10% equity interest in Asset Co and receive vendor notes and perpetual securities. The combined value of approximately S$3.93 billion in vendor notes, approximately S$0.12 billion in perpetual securities and the 10% equity interest in Asset Co is approximately S$4.05 billion.

Asset Co, which will be independently managed from the Combined Entity and Keppel, will maintain, complete and monetise the rigs over time for repayment of the vendor notes and perpetual securities. Asset Co will also enter into a master services agreement with the Combined Entity, through Keppel O&M, for the completion of certain uncompleted rigs and the provision of other services. The external investors of Asset Co will provide capital for completing uncompleted rigs, which would no longer be funded by Keppel.

The two proposed transactions, which are inter-conditional and being executed concurrently, will be subject to relevant regulatory and shareholder approvals, which are expected to be completed by the end of 2022.

Mr Loh Chin Hua, CEO of Keppel Corporation said, “We are pleased to arrive at mutually beneficial definitive agreements on the proposed combination of Keppel O&M and Sembcorp Marine and the resolution of Keppel O&M’s legacy rigs, after extensive negotiations and due diligence by all parties. The proposed transactions are in line with Keppel’s Vision 2030 plans to be more focused and disciplined, and simplify our business, as we execute our mission to provide solutions for sustainable urbanisation. The proposed combination brings together two leading O&M companies in Singapore to create a premier player that is well positioned to address the challenges and opportunities in the evolving offshore & marine sector and the energy transition.

“At the same time, the external investors in the Asset Co transaction will provide capital that can be used for finishing uncompleted legacy rigs, which will no longer be funded by Keppel. With improving conditions in the offshore & marine sector, underpinned by the improving oil price and increasing utilisation and dayrates of offshore drilling rigs, we are confident that Keppel O&M’s legacy rigs can be substantially monetised in the next 3-5 years. Over the past few months, Keppel O&M has received enquiries from potential charterers and buyers for several of the legacy rigs. As Asset Co monetises the rigs, our economic exposure in Asset Co will be reduced over time. The vendor notes and perpetual securities held by Keppel will be gradually repaid by Asset Co and the freed-up funds can be re-invested into future growth initiatives and also used to reward shareholders.

“When the proposed transactions have been successfully executed, Keppel’s Energy & Environment segment would then comprise mainly our business in renewables, clean energy, decarbonisation and environmental solutions. The Group will be much more streamlined, focused and aligned to Keppel’s mission.”

The proposed transactions, if successful, are expected to be earnings accretive to Keppel Corporation for the financial year ended 31 December 2021 on a pro forma basis.

On a pro forma basis, based on the Group’s audited results for the financial year ended 31 December 2021 (FY 2021):

a) had the proposed transactions been completed on 1 January 2021, the earnings per share for FY 2021 would have increased from 56.2 cents to approximately 72.5 cents, excluding the net disposal gain from the proposed transactions.

Including the net disposal gain from the proposed transactions, the earnings per share would have increased to approximately 281.3 cents[4.];

b) had the proposed transactions and proposed distribution[4,5] been completed on 31 December 2021, the net tangible assets per share as at 31 December 2021 would have increased from S$5.53 to approximately S$5.54;

c) had the proposed transactions and propose distribution[4,5]been completed on 31 December 2021, the net gearing as at 31 December 2021 would have decreased from 0.68x to approximately 0.63x.

For further details on the proposed transactions, please refer to the joint announcement released today by Keppel and Sembcorp Marine, as well as the SGXNET announcement released today by Keppel in relation to the proposed transactions.

J.P. Morgan is the financial advisor to Keppel Corporation.
escveritas
Site Admin
Posts: 3181
Joined: Sat Aug 29, 2020 5:40 am
Location: Singapore
Contact:
Singapore

Re: Mergers and Acquisitions

Unread post by escveritas »

Tullow Oil and Capricorn to merge

[media]https://www.capricornenergy.com/media/3 ... vfinal.pdf[/media]
Post Reply

Return to “Financial Results”

Who is online

Users browsing this forum: No registered users and 2 guests