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Infrastructure Giant to Swallow Rival

Wednesday, August 1, 2012

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Just how big will be the new energy infrastructure behemoth created by Chicago Bridge & Iron’s takeover of chief rival Shaw Group?

This big: 50,000 employees. A backlog of more than $28 billion. Engineering and fabrication facilities on every continent.

 Founded in 1889, CB&I engineers and constructs some of the world’s largest energy infrastructure projects.

 CB&I

Founded in 1889, CB&I engineers and constructs some of the world’s largest energy infrastructure projects. The company has three divisions: Lummus Technology, Project Engineering and Construction, and Steel Plate Structures.

CB&I alone has built more than 46,000 steel tanks in its time.

Or, as Chicago Bridge (CB&I) CEO Philip K. Asherman put it Monday: “This is a highly compelling transaction that we believe will create significant value for our shareholders.”

Energy Giant

CB&I, based in The Woodlands, TX, announced Monday that it had signed a $3 billion cash-and-stock deal to buy the Shaw Group, creating “one of the most complete energy focused technology, engineering, procurement, fabrication, construction, maintenance, and associated services companies in the world,” the companies said.

The new enterprise, to be called CB&I Shaw, will reach into power generation, nuclear, coal, LNG, refining, gas processing, offshore and oil sands sectors worldwide, said Asherman.

Both boards of directors have unanimously approved the deal, which is expected to close in early 2013. Complete details of the transaction are available at www.CBI.com.

About CB&I

Founded in 1889, CB&I engineers and constructs some of the world’s largest energy infrastructure projects. The company reported $4.6 billion in revenues last year and currently has three divisions:

• Lummus Technology provides process technologies, catalysts and specialty equipment for petrochemical facilities, oil refineries, and gas processing plants;

• The Project Engineering and Construction group builds upstream and downstream oil and gas projects, LNG liquefaction and regasification terminals, and a wide range of other energy related projects; and

• The Steel Plate Structures unit designs, fabricates and constructs storage tanks and containment vessels and associated systems for the oil and gas, water and wastewater, mining and nuclear industries.

About Shaw

Based in Baton Rouge, LA, the Shaw Group Inc. is a global provider of engineering, construction, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries. The Fortune 500 company had annual revenues of $5.9 billion in fiscal year 2011.

 The Shaw Group is the largest supplier of fabricated piping systems and a leading provider of piping systems worldwide.

 Shaw

The Shaw Group is the largest supplier of fabricated piping systems and a leading provider of piping systems worldwide.

The company has four business groups: Power, Plant Services, Environmental & Infrastructure, and Fabrication and Manufacturing.

Plant Services is one of the largest providers of system-wide maintenance and modifications, servicing nearly 40 percent of U.S. nuclear plants as well as customers in the refining and petrochemical industries.

The Fabrication & Manufacturing Group provides piping, structural steel, and module prefabrication and assembly for power and industrial clients.

“I am extremely proud of the company we have built and operated for the last 25 years,” said J.M. Bernhard Jr., chairman, president and CEO of Shaw. “Shaw’s leadership position in the power, environmental and infrastructure industries will complement CB&I’s current business, and I am confident that, together, these two companies will continue to excel.”

Analysts Reserved

Although Investopedia called the announcement “shocking and awesome,” Wall Street appeared underwhelmed by it. The companies saw five downgrades between them after they announced the deal, the Wall Street Journal reported.

“The three downgrades of Chicago Bridge & Iron were especially notable as analysts weren’t too optimistic about the deal’s implications for CB&I,” the newspaper added.

Shaw shares slipped on Tuesday, Reuters reported, and some analysts were already warning that the deal could fall through.

   

Tagged categories: Acquisitions; Mergers; Nuclear Power Plants; Oil and Gas; Pipeline; Pipelines; ShawCor; Tanks and vessels

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