SembMarine could derive value from buying Keppel assets

A well-structured deal could give SembMarine the economies of scale it needs to compete, say analysts

Published Tue, Feb 16, 2021 · 05:50 AM

Singapore

SEMBCORP Marine (SembMarine) has a "margin problem" that could be solved with an acquisition of Keppel Corp's offshore rig business, some market watchers said. If a deal is structured right, SembMarine could gain the economies of scale it needs to compete.

SembMarine had been a growing weight on the earnings of Sembcorp Industries before it was fully separated from the latter last year. The gross margins of the offshore and marine company had been as high as 11 per cent in 2017, but were a negative 3.2 per cent in 2019.