Samsung Engineering, the first and largest engineering company in Korea, has officially announced that it will merge with Samsung Heavy Industries (SHI), one of the largest shipbuilders in the world especially for drillship LNG carriers and FPSOs.
The merger between Samsung Engineering and SHI was decided during their board of directors meeting on 1 September. The merger ratio will be fixed at 1:2.36. Therefore, SHI will issue new stocks so that the shareholders of Samsung Engineering can exchange their shares for SHI’s shares and receive 2.36 SHI shares for every Samsung Engineering share they own. The two companies plan to hold a special shareholders meeting on 27 October 2014 and complete the merger process on 1 December 2014.
Through the merger, SHI will gain engineering, procurement, and project management capabilities, which are the strengths of Samsung Engineering, and establish a stable foundation for the growth of its offshore plant business. Meanwhile, Samsung Engineering, which has focused its business in onshore hydrocarbon plants, will be able to diversify into high value-added projects such as onshore LNG and offshore plants by securing Samsung Heavy Industries’ offshore plant fabrication capabilities.
The merger will give the two companies a chance to become a global top-tier engineering, procurement and construction (EPC) company. Their goal is to grow into a total solution provider, increasing their combined revenues of 25 trillion Won in 2013 to 40 trillion in 2020.
