The shareholders of National Marine Dredging Company, an Abu Dhabi-listed marine dredging contractor, have voted in favour of a merger with oil and gas contractor National Petroleum Construction Company.
The merger will create "a regional leader in dredging and marine construction", state holding company ADQ, which holds a 32 per cent stake in NMDC according to exchange data, said in a statement on Tuesday. ADQ is also the majority owner (through its subsidiary Senaat) of NPCC.
"The transaction will create one of the largest and most diversified engineering, procurement and construction players in the region, and the complementary nature of the businesses provides a strong platform to capture growth opportunities," Khalifa Al Suwaidi, chief investment officer of ADQ and chairman of Senaat, said.
ADQ holds government stakes in a broad portfolio of companies, including Abu Dhabi Airports, Abu Dhabi Ports, Emirates Steel, Emirates Nuclear Energy Corporation, Etihad Rail, Abu Dhabi Securities Exchange, healthcare operator Seha, media hub TwoFour 54 and others.
Within the past six months, a number of its subsidiaries have been merged to create stronger entities. In July, Abu Dhabi Power Company and Abu Dhabi National Energy Company completed a merger creating a utilities business with Dh200 billion ($54.4bn) of assets. Abu Dhabi Ports also acquired industrial zones operator Zones Corp in the same month. Last month, dates company Al Foah was acquired by food group Agthia, which is also owned by ADQ through its Senaat subsidiary.
The deal to merge NPCC with NMDC is effectively a reverse takeover through which NPCC's assets get transferred to NMDC. In return, NPCC's shareholders would receive convertible instruments which, once converted, would give them a 69.7 per cent stake in the combined entity.
The enlarged group has revenues of almost Dh8.9bn, based on last year's numbers, and serves markets across the Middle East, North Africa and South Asia.
The businesses are complementary but their combination would diversify sources of revenue, making the company more resilient throughout market cycles, ADQ said. It intends to maintain the company's listing on the Abu Dhabi Securities Exchange.
ADQ is being advised on the deal by Moelis & Company and Allen & Overy.