EPC firm Chicago Bridge & Iron announced yesterday it has agreed to acquire Shaw Group. for $3.04 billion in cash.
The acquisition will strengthen CB&I’s oil and natural gas engineering offering, and supplement expertise in nuclear power. Shaw is working on nuclear power projects in North America, and the purchase signals a bet that the US will embrace another round of nuclear investment.
CB&I will become a more US-focused outfit group-wide. 90% of CB&I’s current business is tied to oil and gas projects.
CB&I says that it will operate Shaw under the brand name CB&I Shaw. The new company will have about 50,000 employees and a nearly $30 billion backlog.
“We will become fully diversified across the entire energy sector, from power generation to LNG, from refining to gas processing, from offshore to oil sands, and beyond,” CB&I Chief Executive Philip K. Asherman, said in a company statement. Speaking later to investors, he added that the combined CB&I would be “one of the largest Western companies in the business, and likely the largest company in resources targeted to the energy sector.”
Shaw holders will receive $46 a share, a 72% premium over Friday’s closing price, with the deal expected to go through in 2013.
Shareholders in CB&I reacted negatively to the news, with shares trading down 14% in New York. Analysts says the acquisition caught them off guard, as CB&I has previously pursued an incremental acquisition program.
