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CB&I to acquire The Shaw Group for $3 billion

CB&I to broaden energy portfolio from LNG to Nuclear

July 30th, 2012, CB&I and The Shaw Group (Shaw) announced to have closed a deal by which CB&I will acquire The Shaw Group.

Shaw is a 25 years old engineering and services company well established as global provider of:

Engineering and construction

 – Technology

 – Fabrication

 – Remediation

 – Support services

for clients in the:

 – Energy such as power generation and utilities, public sector, oil and gas industry

 – Chemicals

 – Nuclear

 – Environmental

 – Infrastructure and emergency response industries. 

CB&I entered the energy sector in building up complex infrastructures in the:

 – Upstream activities such as liquefied natural gas (LNG), natural gas processing, offshore and onshore, oil sands

 – Midstream with long standing experience in storage tanks and Terminals

 – Downstream business with refining and Petrochemicals complex

The merger of CB&I and Shaw activities will provide one of the most complete energy focused technology covering:

 – Project Management Consultancy (PMC) Services

 – Front End Engineering and Design (FEED)

 – Engineering, Procurement and construction (EPC)

 – Fabrication

 – Maintenance

 – Engineering associated services

CB&I and Shaw expect to have completed the acquisition on early 2013.

Shaw’s operations to be branded CB&I Shaw

CB&I will acquire Shaw for $46.00 per share in cash and stock.

Shareholders will receive $41.00 in cash and $5.00 in CB&I equity (0.12883 shares based on an agreed upon recent average stock price of $38.81 per share) for each share of Shaw stock at closing.

CB&I will use cash on the balance sheets of both companies, along with approximately $1.9 billion in debt to finance the acquisition.

In the fiscal year 2011 CB&I and Shaw booked annual revenues of $4.6 billion and $5.9 billion respectively.

CB&I and Shaw will consolidate approximately 50,000 employees, 23,000 employees from CB&I and 27,000 from Shaw.

With a global backlog of over $28 billion, and engineering and fabrication facilities strategically located on all continents, the new formed company will have the critical mass necessary to execute the largest energy infrastructure projects now and into the future, especially in the nuclear sector.

CB&I plans to operate Shaw as a business sector under the brand name CB&I Shaw.

This will enable the company to retain Shaw’s brand equity, particularly in the power industry, and it will allow the combined organization to capitalize on the resources, capabilities, and best practices from each group for the benefit of all stakeholders.

Technip had just acquired Shaw Energy & Chemicals

Last May Technip had acquired the Shaw Energy & Chemicals Division, mostly based on Stone & Webster for approximately $300 million.

As part of the Energy & Chemicals business acquired by Technip there were some critical assets:

 – One of Shaw’s core proprietary process technologies is ethylene and its co-product, propylene

 – Badger Licensing LLC, a 50/50 joint venture between affiliates of The Shaw Group Inc. and ExxonMobil Chemical Co., offers premier proprietary technologies in the styrenics and phenolics petrochemical chains.

In 2008ENR ranked Stone & Webster as a Shaw Group subsidiary as:

 – 1st by Revenue for Power EPC

 – 5th by Revenue in Process & Petrochemical EPC.

After acquiring Lummus and now consolidated revenues above $10 billion the new entity CB&I and Shaw will take a solid Market Leadership among the engineering and services companies to the Energy and Oil & Gas and Petrochemical industries.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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