Bumi Armada Bhd and Petronas-linked MISC Bhd have mutually called off their proposed merger, ahead of the lapse of their memorandum of understanding (MOU) on Aug 14.
The merger proposal, first announced in November 2024, was set to involve the two companies’ floating production storage and offloading (FPSO) vessel business.
In a filing, MISC said its board is of the view that the proposed merger “would not fully achieve the intended strategic objectives” following evaluation and discussions.
“The company will continue with its other growth plans,” MISC said.
Separately, Bumi Armada said it will continue to pursue growth opportunities “supported by its robust financial position”.
When announcing the proposal in November, the companies said the merger “will establish a Malaysian-based sector-focused entity which leverages the combined talent pool, project development and engineering capability, and know-how” of both firms.
The deal could have seen Bumi Armada, which has seven FPSOs under its belt, enjoy a higher valuation following years of depressed sentiment amid project hiccups in the past at the time when it was weighed by balance sheet issues during the last oil price downturn.
Bumi Armada’s FPSOs operate across India, the UK, Vietnam and Angola, of which three are wholly owned and which analysts value at around RM4.6 billion.
The company, linked to the late Ananda Krishnan through his stake in Usaha Tegas Sdn Bhd, owns one liquefied natural gas (LNG) floating storage unit. It has operating rights in for two offshore oil and gas upstream assets in Indonesia, and is venturing into LNG trading in the region as well as carbon capture facility development in the UK.
MISC, a KLCI component stock, operates a larger offshore fleet of 12, which analysts value at around RM10 billion at equity level across Malaysia, Brazil and Vietnam.
It has six FPSOs, five floating production and offloading vessels, and one semi-submersible floating production system.
The 51%-Petronas shipping entity also operates an even bigger energy shipping business covering both LNG and petroleum.
Shares of MISC settled five sen or 0.66% higher at RM7.65 on Monday, giving it a market capitalisation of RM34.15 billion. Bumi Armada shares fell 2.5 sen or 5.68% to 41.5 sen, giving it a market cap of RM2.46 billion.
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