South Korean shipbuilder Samsung Heavy has announced its decision to merge with Samsung Engineering during their board of directors meeting on 1 September.

Samsung Engineering is the first and largest engineering company in Korea.

In a statement, Samsung Heavy said that the decision will create a "world-class total solution provider for shipbuilding and onshore and offshore services."

Samsung Heavy Industries president and CEO Dae-young Park said: "The two companies will be reborn as the world’s most competitive plant company based on our world-class manufacturing facilities, fabrication experience and outstanding technical manpower in the onshore and offshore businesses."

"We will emerge as a total solution provider that caters to the diverse needs of our clients."

Samsung Engineering president and CEO Choong Heum Park was quoted as saying: "We will emerge as a total solution provider that caters to the diverse needs of our clients by combining the expertise and technologies we have each accumulated as individual companies in the plant, shipbuilding, and offshore industries."

The merger ratio will be fixed at 1:2.36 and the shareholders of Samsung Engineering will be able to exchange their shares after the issue of around 94 million new shares by Samsung Heavy Industries, in which they will get 2.36 shares of the latter one for every share they own.

With this decision, Samsung Heavy will acquire engineering, procurement, and project management capabilities.

At the same time, Samsung Engineering will be able to focus into high value-added projects such as onshore LNG and offshore plants by securing Samsung Heavy Industries’ offshore plant fabrication capabilities.

The merger process will be completed on 1 December this year.