Bumi Armada

MISC Bhd and Bumi Armada Bhd have decided to walk away from merger discussions that could have created one of the world’s largest floating production, storage and offloading (FPSO) operators, ending months of market speculation over a potential industry-defining deal.

In separate filings to Bursa Malaysia, both companies said they had mutually agreed not to proceed with the proposed merger.

The non-binding memorandum of understanding (MOU) signed on Nov 14, 2024, will lapse on Aug 14, 2025, in accordance with its terms.

MISC said after thorough evaluation, the proposed merger would not fully meet its strategic objectives.

The Petronas-linked shipping giant added that it will continue pursuing other growth plans.

Bumi Armada, meanwhile, stated that it will remain focused on strategic growth opportunities, backed by a strong financial footing.

The decision comes just days after both companies had indicated that due diligence was still ongoing and said they would update the market upon any material development.

The proposed merger was expected to combine MISC’s offshore business with Bumi Armada in a share-based transaction that would see the merged entity remain listed on Bursa Malaysia.

It would have brought together MISC’s five FPSOs, including the Marechal Duque de Caxias delivered to Petrobras in Brazil, and Bumi Armada’s fleet of seven FPSOs such as Armada Kraken and Armada Olombendo, significantly increasing scale and geographical reach.

MISC also operates five floating storage units (FSOs) and the Gumusut-Kakap semi-submersible production platform.

Bumi Armada’s FPSO presence spans across Asia, West Africa and the North Sea.

While the strategic rationale behind the merger was never fully detailed, market speculation intensified in July 2024 following local reports that MISC was in talks to acquire a significant stake in Bumi Armada. — TMR