Shipbuilding behemoth Samsung Heavy Industries is to merge with sister company Samsung Engineering as the pair aim to significantly boost revenues by the end of the decade.
The South Korean companies are set to be merged by 1 December following a meeting between their boards on Monday, they said.
Samsung Heavy Industries is to issue new shares, with shareholders in Samsung Engineering to get 2.36 shares in the former for each share in the latter.
A special shareholder meeting to discuss the planned merger is set for 27 October.
“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,” the company said.
“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 liquefied natural gas and offshore plants by securing Samsung Heavy Industries’ offshore plant fabrication capabilities.”
The pair have set their sights on growing combined revenue from 25 trillion won ($24.68 billion) last year to 40 trillion won in 2020.
“The two companies will be reborn as the world’s most competitive plant company based on our world-class manufacturing facilities, fabrication experience, and outstanding technical manpower in the onshore and offshore businesses,” said Dae-young Park, president and chief executive of Samsung Heavy Industries.
Choong Heum Park, president and chief executive of Samsung Engineering, said: “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.”