Kencana is to buy underwater services and construction company Allied Marine & Equipment (AME) in a scrip deal for $131.8m.

In pursuance to the scrip deal, Kencana will issue 149.25 million shares of MYR2.68 ($0.88) each to Worldclass Inspiration and Allied Holdings to acquire AME.

Worldclass and Allied hold 90% and 10% interests, respectively, in AME.

Kencana said the acquisition would allow it to gain exposure to the rapidly growing offshore subsea business in Malaysia and South East Asia.