Abu Dhabi's NPCC, NMDC eye mega-merger to create EPC powerhouse
The transaction could create a regional EPC powerhouse, with integrated 2019 revenue of $2.41bn (AED8.875bn)
General Holding Corporation (Senaat) a part of ADQ, and other minority shareholders of National Petroleum Construction Company (NPCC) announced that an offer has been submitted to the Board of National Marine Dredging Company (NMDC) to combine NPCC with NMDC.
The proposed transaction could create a national and regional integrated EPC powerhouse, with integrated 2019 revenue of $2.41bn (AED8.875bn). The combined group would also be one of the largest integrated oil and gas, and marine services EPC players, with an established footprint in key markets within MENA and South Asia.
Senaat and other minority shareholders of NPCC are proposing to transfer the entire issued share capital of NPCC to NMDC. In consideration for the issued share capital transfer, NMDC would issue to Senaat and other minority shareholders of NPCC a convertible instrument, which is convertible into 575,000,000 ordinary shares in the combined group upon closing of the transaction.
The price at which the convertible instrument will convert into shares in NMDC is AED4.40 per share. The offer implies an equity value of NMDC of $299.5m (AED1.1bn).
Moelis & Company is acting as financial advisor to ADQ, while Allen & Overy LLP is acting as its legal advisor.
If NMDC’s board recommend the offer, and its shareholders vote in favour, then the transaction could close towards the end of 2020, subject to regulatory approvals, according to state-run news agency, Wam.
Commenting on the proposed transaction, the chief investment officer at ADQ and chairman of Senaat, Khalifa Sultan Al Suwaidi, said: "As one of the largest pan-regional EPC players, this transaction will create a larger, more diversified and financially flexible national champion.
“By bringing together two highly complementary businesses, we will be able to successfully drive increased growth while showcasing the very best of Abu Dhabi and its industry-leading capabilities on the global stage.
“We are excited about the significant opportunity that can be created via this transaction, driving performance and growth to generate value not only for shareholders, but the UAE as a whole.”
Subject to completion of the transaction, ADQ and Senaat will also consider increasing the free float of the combined group through a follow-on public offering at a later date.