The deal comes a year after the two firms started talks regarding a possible merger to cope with downturn in the industry due volatility in oil prices and a reduced number of new orders, reported Reuters.
The latest agreement will result in the creation of a new entity that will focus on offshore renewables, new energy, and cleaner solutions in the offshore and marine sector (O&M).
Upon completion of the deal, Keppel O&M and Sembcorp will be wholly-owned by a new holding entity.
Keppel CEO Loh Chin Hua said: “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 and marine sector, and the energy transition.”