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M & A News: Keppel Corp. Acquires Aermont Capital for a European Boost

This article is republished with permission from Tip Ranks .

30-Nov-2023    Share!

SGX-listed Keppel Corporation Limited (SG:BN4) announced the acquisition of a 50% stake in the Europe-based asset manager Aermont Capital. The deal will go through the company's asset management division, Keppel Capital Holdings, and will be completed in two parts, amounting to a maximum consideration of S$1.35 billion.

According to the terms of the deal, Keppel Capital is set to acquire a 50% stake in Aermont for S$521.8 million, which is expected to close in the first half of 2024. Keppel also intends to acquire the remaining stake in Aermont in 2028 for not more than ?575 million.

The share price gained 3.73% today in reaction to the announcement of the news.

Keppel is a diversified group involved in multiple industries such as marine, infrastructure, energy, asset management, and urban development.

The Deal Rationale

The first part of the acquisition is expected to contribute positively to Keppel’s earnings immediately post-completion in 2024, which is dependent on regulatory approvals.

The acquisition is poised to strengthen Keppel's FUM (funds under management), which is expected to expand from the existing $53 billion to over $77 billion. This represents substantial progress toward Keppel’s target of reaching S$100 billion in FUM by 2026.

Aermont is a European asset management group specializing in real estate and real estate-related investment concentrated in core Western European markets. As a result, the deal will establish a robust presence for Keppel in Europe, representing a significant expansion of the company's presence beyond the Asia-Pacific region. The company stated that it views the acquisition as an important milestone in its "transformation to be a global asset manager and operator."

Is Keppel a Buy or Sell?

According to TipRanks consensus, BN4 stock has received a Strong Buy rating on TipRanks, backed by three Buy recommendations. The Keppel share price prediction is S$8.22, which is 28% higher than the current price level.

Given that these ratings were last updated in October, it is likely that there will be some positive changes following this acquisition.


Contributed By: Tip Ranks

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