The merger would create a company with integrated 2019 revenue of $2.42 billion

he shareholders of the National Petroleum Construction Company (NPCC) have made an offer to combine the company with the National Marine Dredging Company (NMDC).

Senaat, a part of ADQ, and other minority shareholders of NPCC, submitted the offer with the aim of creating a national and regional integrated EPC company with an established footpring in the Middle East, North Africa, and South Asia. The combined entity would have integrated 2019 revenue of $2.42 billion (AED8.875 billion).

“It is the intention to maintain NMDC’s existing listing, positioning the combined group as one of the largest companies on the Abu Dhabi Securities Exchange, ADX, which is expected to have a positive impact on overall demand and liquidity for the combined group’s shares,” according to a joint press release.

The deal would be a reverse merger, transfering NOCC’s assets to NMDC. NPCC shareholders would receive a convertible instrument which would give them a 69.7% stake in the company once converted. The deal places NMDC’s equity value at $300 million (AED 1.1 billion).

Khalifa Sultan Al Suwaidi, Chief Investment Officer at ADQ and Chairman of Senaat, commented, “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,” he added.

If the offer is accepted and receives the necessary  regulatory approvals, the transaction is expected to close towardds the end of 2020.

Moelis & Company is acting as financial advisor to ADQ, while Allen & Overy LLP are acting as its legal advisor.

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