Oilfield equipment and services provider McDermott International and US-based Chicago Bridge & Iron Company (CB&I) have signed a deal to merge, and create a fully vertically integrated onshore-offshore company with $6bn enterprise value.
The combined company is expected to have a broad engineering, procurement, construction and installation (EPCI) service offering and market leading technology portfolio.
Under the terms of the agreement, CB&I shareholders will receive 2.47221 shares of McDermott common stock for each share held.
McDermott president and CEO David Dickson said: “This transaction combines two highly complementary businesses to create a leading onshore-offshore EPCI company driven by technology and innovation, with the scale and diversification to better capitalize on global growth opportunities.”
Upon completion of the deal, shareholders McDermott will have approximately 53% in the combined company while CB&I shareholders will own the remaining 47%.
The combined company will have revenues of approximately $10bn and backlog of approximately $14.5bn.
CB&I president and CEO Patrick Mullen said: “The combination with McDermott maximizes value for shareholders and provides the opportunity to participate in significant upside potential as we create a premier vertically integrated engineering, procurement, fabrication, construction and installation provider with significant scale, diversification and global presence.
“This unique opportunity to combine with McDermott was presented as we pursued the sale of our Technology and former Engineered Products businesses.”
Expected to be completed in the second quarter of 2018, the transaction is subject to regulatory antitrust approvals, approval by McDermott’s and CB&I’s shareholders and other customary closing conditions.
In addition to offering engineered and constructed facility solutions and fabrication services across the full lifecycle, the combined company will provide customers an enhanced exposure across diverse end markets, including refining, petrochemicals, LNG and power, the companies said.
The new entity, which combines McDermott’s presence in the Middle East and Asia with CB&I’s operations in the US, will have a presence across onshore and offshore, upstream, downstream and power markets.
Image: CB&I’s administrative headquarters in the US. Photo: courtesy of WhisperToMe/Wikipedia.