Sembcorp Industries Shareholders Approve Transformative A\$6.5 Billion Australian Acquisition

Key Highlights from the Extraordinary General Meeting (EGM) on January 30, 2026

Sembcorp Industries Ltd (SCI) has received overwhelming shareholder approval at its Extraordinary General Meeting (EGM) for a landmark acquisition estimated at A\$6.5 billion (approximately S\$5.6 billion). This acquisition is set to dramatically expand the company’s footprint in the Australian energy market and accelerate its strategic pivot towards renewables and energy transition.

1. Overview of the Proposed Acquisition

• Transaction Structure: Sembcorp Australia Pty Ltd, an indirect wholly-owned subsidiary, will acquire all issued share capital in PSH, while Sembcorp Energy Australia Pte. Ltd. will acquire the issued share capital in LVP from Pioneer Sail Singapore Pte Ltd.
• Purpose: The acquisition is designed to add significant scale and diversity to Sembcorp’s portfolio, particularly within renewables and gas, supporting its strategic plan to drive the energy transition.
• Complementary Assets: The deal brings a substantial renewables pipeline from Alinta, strengthening Sembcorp’s position in wind, solar, and energy storage. Alinta’s gas assets will also provide reliable firming capacity for intermittent renewables, critical for grid stability and energy security in Australia.

2. Immediate Financial Impact and Shareholder Value

• Immediate Earnings Accretion: Based on illustrative pro forma effects for the twelve months ending June 30, 2025:
  • Adjusted EBITDA and net profit are projected to increase by 42% and 23% respectively.
  • Earnings per share (EPS) is expected to rise by 23% to S\$0.70.
  • Return on equity (ROE) will increase to 24.3%.
• Funding Structure: The acquisition will be funded entirely in cash via a fully committed A\$6.5 billion bridge facility. Notably, no equity funding is required, which means no immediate share dilution for existing shareholders.
• Dividend Policy: Sembcorp reaffirmed its commitment to balancing cash returns to shareholders with investments to sustain growth, aiming for an efficient capital structure.

3. Valuation, Competitive Process, and Deal Execution

• Valuation Process: The purchase price was supported by a fairness opinion from DBS Bank Ltd. and Goldman Sachs (Singapore) Pte., using discounted cash flow (DCF) and precedent transactions methodologies. The transaction was deemed competitively priced, benchmarking favorably against recent Australian energy sector deals (EV/EBITDA of ~7x to ~11x).
• Competitive Bidding: The sale was conducted via a competitive process with multiple bidders, indicating strong market interest in the asset.
• Execution Track Record: The Board and management highlighted their robust M&A execution and transformation track record, having delivered ahead of schedule over the last 3–5 years.

4. ESG Considerations and Impact on Emissions

• Short-term Emissions Increase: Sembcorp acknowledged that the acquisition will result in a near-term increase in emissions intensity (to 0.36 tCO₂e/MWh) and absolute emissions (to 18.1 million tCO₂e in 2025). The company will not meet its 2028 emissions intensity and 2030 absolute emissions targets as a result.
• Long-term Commitment: Sembcorp remains committed to achieving net zero (Scope 1 and 2) by 2050, targeting emissions intensity of 0.26 tCO₂e/MWh by 2035. The company plans to grow renewables, leverage low-carbon technologies, and manage fossil assets for efficiency to achieve these goals.

5. Shareholder Approval and Poll Results

• Resounding Support: The ordinary resolution to approve the acquisition was passed with overwhelming shareholder support—99.76% of votes cast in favor (1,210,906,396 shares for, 2,863,219 against out of 1,213,769,615 total shares represented).
• Next Steps: With shareholder approval secured, the company will proceed to complete the transaction, subject to regulatory approvals.

6. Key Considerations and Potential Share Price Impact

• This is a transformative deal for Sembcorp, immediately boosting earnings, EPS, and ROE, while significantly expanding its asset base in a high-growth renewables market.
• The short-term increase in emissions may concern some ESG-focused investors, but the company’s clear long-term net zero commitment and growth in renewables may offset these concerns.
• The use of debt (fully committed bridge facility) rather than equity limits immediate shareholder dilution, a positive for investor sentiment.
• The scale and competitive nature of the acquisition, combined with management’s strong track record, suggest confidence in execution and value creation.
• Given the size, strategic importance, and immediate financial impact of this acquisition, this news is highly significant and likely to move Sembcorp’s share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to review official company disclosures and consult professional advisors before making investment decisions.

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