JTC, Temasek seal deal to merge four subsidiaries

(1)

« Return to article Print this

www.straitstimes.com Published on Feb 17, 2015

The Straits Times

JTC, Temasek seal deal to merge four subsidiaries

Units will form one of region's largest integrated urban solutions providers

By Wong Wei Han

INDUSTRIAL landlord JTC Corporation and Singapore investment company Temasek have officially sealed their agreement to merge four of their subsidiaries into a single platform.

This powerful new platform, worth $5 billion, will become one of the region's largest integrated urban solutions providers.

The idea of merging JTC subsidiaries Ascendas and Jurong International Holdings (JIH) as well as Temasek units Surbana International Consultants and Singbridge Group was first flagged in September last year.

After due diligence on both sides, the final partnership was formally announced by senior figures from both parties at a press conference yesterday.

The new platform will be a 49:51 partnership between JTC and Temasek, with a total value of about $5 billion.

Within the platform, which will be formed within the first half this year, the four companies will be organised into two arms.

The companies are still finalising details of the merger, including the official names of the new entities.

But the four companies should see minimal impact to their current business and operations, JTC and Temasek said.

Ascendas and Singbridge will become the asset investment and holding arm, while Surbana and JIH will be the technical unit offering construction and engineering services.

Singbridge chairman Wong Kan Seng will be chairman of the investment and holding unit, while current Singbridge executive director Miguel Ko will become the chief executive.

Meanwhile, Surbana chairman Liew Mun Leong will chair the technical unit with Mr Wong Heang Fine as chief executive.

The unique twinchairman structure is to ensure a clear separation to avoid conflict of interests, and to allow the engineering and construction units to grow independently, Temasek enterprise development and Singapore head Dilhan Pillay Sandrasegara said during the press conference.

The merger is complementary in nature and will position the companies for Asia's urbanisation boom, Mr Wong Kan Seng noted.

"By 2025, 600 of the world's largest cities will generate about 60 per cent of global gross domestic product, and emerging cities will account for almost half of the world's growth," Mr Wong said.

"As an integrated company, we will have better scale and deeper expertise to handle many large scale and complex urban development projects."

All four companies are already wellestablished players in urban, industrial and infrastructural development.

(2)

They combine an extensive portfolio that includes the Guangzhou Knowledge City and Tianjin Ecocity projects in China, industrial park development in Singapore and India, as well as infrastructural

consulting in the Middle East, among other things.

Just last month, Surbana and JIH were appointed master planners for the development of the new capital city for India's Andhra Pradesh.

Mr Liew said that the SurbanaJIH unit is set to grow its consultancy fees of $500 million currently to $1 billion to $1.5 billion in the next three to five years as a result of the merger, while doubling its

combined headcount of 3,200 people.

In a related development, CapitaLand yesterday announced that it is selling its 40 per cent stake in Surbana to Temasek subsidiary Arakan Investments for $104 million cash.

Arakan will in turn sell its 60 per cent stake in CapitaLand Township Holdings to CapitaLand for $240 million.

With this move, Surbana will be fully owned by Temasek.

whwong@sph.com.sg