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Combination of Keppel O&M and Sembcorp Marine

Mar 31, 2022

Keppel Corporation and Sembcorp Marine refer to the joint press release on 24 June 2021 announcing the commencement of exclusive negotiations with a view to combining Keppel Offshore & Marine Ltd (Keppel O&M) and Sembcorp Marine (Proposed Combination).

Each of Keppel and Sembcorp Marine wishes to update their respective shareholders that significant progress has been made on advancing the Proposed Combination, including mutual due diligence, the transaction structure, exchange ratio and other related matters.

In response to the dramatic changes in the global offshore & marine engineering and energy sectors in recent years, the objective of the Proposed Combination is to create a stronger Combined Entity, leveraging respective strengths to realise synergies and deliver sustainable value over the long term for shareholders.

Both parties are devoting considerable resources to progressing the Proposed Combination. However, more time and deliberation will be required to complete due diligence, reach mutual agreement on the transaction terms and finalise definitive legal documentation. Both parties are committed to continue with exclusive negotiations and work towards a definitive agreement by 30 April 2022.

Keppel also wishes to update that significant progress has been made on advancing the sale of Keppel O&M’s legacy rigs and associated receivables to a separate company (Asset Co) that would be majority owned by external investors. As previously announced, this Asset Co transaction and the Proposed Combination will be inter-conditional and are being pursued concurrently.

Each of Keppel and Sembcorp Marine will provide further updates in due course. In the meantime, the companies would like to emphasise that while discussions in relation to the Proposed Combination and the Asset Co transaction are ongoing, there is no guarantee that definitive agreements will be executed. Furthermore, any definitive agreements that the companies may agree upon will also be subject to conditions including relevant regulatory and shareholder approvals.

Shareholders of each of Keppel and Sembcorp Marine are advised to exercise caution when dealing with their shares and other securities of the companies as there is no certainty or assurance that the Proposed Combination and/or the Asset Co transaction will be undertaken. Shareholders should consult their professional advisors if they have any doubt about the actions they should take.

In this announcement, capitalised terms used, where the context requires, shall have the same meaning ascribed to them in the 24 June 2021 Press Release.