UAE construction giants consider merger

By Andy Brown25 August 2020

1280px-Abu_dhabi_skylines_2014

Abu Dhabi is in the United Arab Emirates (UAE)

Two of Abu Dhabi’s largest contractors, National Petroleum Construction (NPCC) and National Marine Dredging (NMDC) are reportedly considering a merger.

Shareholders in NPCC have proposed a merger with marine construction specialist NMDC to create what would be one of the largest oil and gas and marine services companies in the Middle East and Africa region with combined revenues of approximately US$2.4 billion.

Under the proposal, Senaat – NPCC’s largest shareholder – and other minority shareholders of NPCC would transfer the company’s entire issued share capital to NMDC. In return, NMDC would issue to Senaat and the other shareholders an arrangement convertible into 575,000,000 ordinary shares in the combined group upon closure, valued at US$1.19 per share.

Colin Foreman, deputy editor of GlobalData, commented that, “The potential National Marine Dredging Company (NMDC) and National Petroleum Construction Company (NPCC) merger shows that Abu Dhabi is now moving to clean up its construction sector and consolidate the contracting companies it controls.

“The proposed agreement is ostensibly a good news story: combined, the two companies will be a UAE national champion and one of the largest integrated oil and gas and marine services engineering, procurement and construction (EPC) players in the region, with integrated 2019 revenue of AED8.875 billion ($2.41 billion).”

If NMDC’s board recommend the offer and its shareholders vote in favour, the deal could close toward the end of this year, subject to regulatory approvals.

MAGAZINE
NEWSLETTER
Delivered directly to your inbox, World Construction Week Newsletter features the pick of the breaking news stories, product launches, show reports and more from KHL's world-class editorial team.
Longer Reads
Interview: Manitou Group committed to carbon reduction
Manitou CEO Michel Denis discusses green targets, as part of major new CSR project 
Palfinger attack highlights escalation in cyber crimes
What lessons does the Palfinger case have for the wider construction equipment industry?
Computer vision AI sees the way forward
Salman Chaudhary, CEO at EmpiricAI, explains why computer vision AI offers a glimpse of the future of health & safety in the construction sector
CONNECT WITH THE TEAM
Andy Brown Editor, International Construction Tel: +44 (0) 1892 786 224 E-mail: andy.brown@khl.com
Simon Kelly Sales Manager Tel: +44 (0) 1892 786 223 E-mail: simon.kelly@khl.com
CONNECT WITH SOCIAL MEDIA