Dear readers, will the privatisation of Sembcorp Marine stock be coming? It was announced today that Temasek has offered to buy control of Keppel Corp, a move that could hasten the consolidation of the offshore oil and rig businesses here with the two largest players here being Keppel Corporation and Sembcorp Marine.
I have long been a proponent that Sembcorp Marine stock will be merged or consolidated with Keppel Corporation as it makes sense to consolidate the offshore oil and rig businesses here at the current low oil prices. The consolidation will be for efficiency, like what we have seen for the other local businesses like the airlines (think Tiger Airways and SMRT) and others.
Sembcorp Marine price rallied by over 11% today with the speculation of its privatisation coming. I think there will be more upside for Sembcorp Marine if the speculation continues. But I have to highlight that from what I have read, a strategic review of Keppel Corporation’s businesses will commence only when the control of Temasek of Keppel Corporation is complete. I think the privatisation of Sembcorp Marine through a possible merger with Keppel Corporation will only be likely at that then.
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