Sembcorp Industries Ltd (SGX: U96) saw its stock price surge 3.58% during intraday trading, following the announcement of a significant strategic move to increase its stake in Senoko Energy. The company signed a sale and purchase agreement that could potentially more than double its current interest in the energy provider.

According to the announcement, Sembcorp's wholly-owned subsidiary, Sembcorp Utilities, has entered into an agreement to acquire up to 57.1% interest in Lion Power, which holds a 70% stake in Senoko Energy. This acquisition could increase Sembcorp's effective stake in Senoko Energy to a maximum of 70%, up from its current 30% holding. The maximum purchase consideration for the proposed acquisition is set at S$144 million.

Investors reacted positively to this strategic move, as it aligns with Sembcorp's focus on expanding its energy business. The acquisition is expected to be completed in the second quarter of 2025, subject to certain conditions, including Marubeni Corporation's pre-emptive rights. While Sembcorp stated that the acquisition is expected to increase its profitability, it also noted that it would not have a material impact on the group's net tangible assets per share for the financial year ending December 31.