(Bloomberg) — Abu Dhabi is seeking to create a national champion in oil services by merging National Petroleum Construction Co. and local rival National Marine Dredging Company PJSC.

NMDC shares rose 14% in Abu Dhabi on Sunday to 5 dirhams, their highest since March 2017, after NPCC’s shareholders proposed the deal.

NPCC, ultimately controlled by the Abu Dhabi government through one of its investment vehicles, ADQ, wants to transfer all the firm’s share capital to NMDC, according to a statement released on Sunday. The merger would create an entity that had a combined revenue of 8.9 billion dirhams ($2.4 billion) last year.

“This transaction will create a larger, more diversified and financially flexible national champion,” said Khalifa Al Suwaidi, chief investment officer at ADQ and chairman of Senaat, which is NPCC’s main shareholder and itself controlled by ADQ.

Abu Dhabi, the oil-rich capital of the United Arab Emirates, has been merging some companies as it looks to bolster the economy and diversify from hydrocarbon production. Earlier this year, it decided to combine utilities Taqa and ADPower.

Follow-on Offering

Under the latest proposal, NMDC would issue NPCC shareholders an instrument convertible into 575,000,000 ordinary shares in the combined group upon the closing of the transaction, the statement said. The price at which the instrument would convert into NMDC shares is 4.40 dirhams per share. The offer implies an equity value for NMDC of 1.1 billion dirhams, the statement said.

NMDC would continue to be listed on the Abu Dhabi Securities Exchange, and would become one of its biggest companies, the statement said.

ADQ, which is being advised by Moelis & Co., said it will consider increasing the entity’s free float though a follow-on offering in due course.