Marine services provider Mermaid Marine plans to buy Singapore-based competitor Jaya for $550 million.
The offshore oil and gas services company entered a trading halt on Tuesday morning pending the announcement.
It will fund the deal through a $317 million equity raising, borrowing the balance through NAB and ANZ.
The company said Jaya was an established offshore oil and gas services providers with a fleet of 27 vessels and two shipyards in Singapore and Indonesia.
The takeover agreement comes as Mermaid Marine's net profit for the six months to December 31 slumped 25.5 per cent to $24.2 million.
Company chairman Tony Howarth said several key projects starting later than expected, while some including three major liquefied natural gas projects - Shell's Prelude, Inpex's Ichthys and Chevron's Wheatsone - yet to begin.
Mermaid Marine managing director Jeffrey Weber said the Jaya deal, which is subjected to shareholder approval at a meeting scheduled for April, would deliver deliver immediate scale in international markets.
''This acquisition provides increased geographic diversification for our vessel operations through the addition of a complementary vessel fleet which already has operations in markets across south east Asia and the middle east,'' Mr Weber said.''Ownership of two shipyards located in Asia will allow us to combine Mermaid Marine's existing marine technical expertise with [offshore engineering services] technical shipbuilding capability.''
Shareholder activist Stephen Mayne supported the deal on social media. ''Big deal for Mermaid Marine and Australia for that matter. As the world's biggest island we've been hopeless at shipping,'' Mr Mayne posted on Twitter.''Australia should be a global powerhouse in shipping the MUA [Maritime Union of Australia] has a lot to answer for. Well done to Mermaid Marine, '' he wrote in another post.''
The equity raising will be structures as a seven to 18 underwritten pro rata accelerated renounceable entitlement offer, priced at $2.40 a share.
Mermaid Marine's shares, which are yet to emerge from the trading halt, sank 3.1 per cent on Monday to $2.81.
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