At a board of directors meeting on Sept. 1, it was decided that Samsung Heavy Industries will merge with Samsung Engineering to create a “world-class total solution provider for shipbuilding and onshore and offshore services.”
The merger ratio will be fixed at 1:2.36. Therefore, Samsung Heavy Industries will issue new stocks so that the shareholders of Samsung Engineering can exchange their shares for the Samsung Heavy Industries’ shares and receive 2.36 Samsung Heavy Industries shares for every Samsung Engineering share they own.
The two companies plan to hold a special shareholders meeting on Oct. 27, 2014 and complete the merger process on Dec. 1, 2014.
Through the merger, Samsung Heavy Industries 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, which is recognized as one of the best in the world.
The merger will give the two companies a chance to become a global top-tier EPC (Engineering, Procurement and Construction) company. Their goal is to grow into a world-class total solution provider, increasing their combined revenues of 25 trillion won in 2013 to 40 trillion won in 2020.
“We will emerge as a total solution provider that caters to the diverse needs of our clients by combining the expertise and technologies we have each accumulated as individual companies in the plant, shipbuilding, and offshore industries," said Choong Heum Park, president and CEO of Samsung Engineering.