Shaw buyout to create global giant

31 July 2012

The Chicago Bridge & Iron Company (CB&I) is to acquire Shaw Group in a transaction worth an estimated $3 billion. CB&I Shaw will become one of the world's largest energy industry engineering and construction companies.

Sanmen 1 and 2, 19 June 2012 (SNPTC) 460x306
One of Shaw's most prestigous jobs: constructing two AP1000 units at Sanmen in China in partnership with Westinghouse. This picture was taken on 19 June

The transaction brings together energy services company Shaw with global engineering, procurement and construction company CB&I. According to CB&I, combining the two firms will create one of the world's "most complete energy focused technology, engineering, procurement, fabrication, construction, maintenance, and associated services companies," able to handle the largest of energy infrastructure projects.

CB&I will acquire Shaw for $46 per share in cash and stock, with Shaw's shareholders receiving $41 in cash and $5 in equity per share. The acquisition has already been unanimously approved by the boards of directors of both companies but is still subject to approval by regulators and shareholders. It is expected to close early next year.

CB&I president and CEO Philip Asherman said the transaction would enable the company, which has up to now specialised in oil and gas projects, to become fully diversified across the entire energy sector. "We will have the capabilities and the expertise to provide our clients with the full range of solutions, wherever they are in the world." Shaw president, chairman and CEO JM Bernhard Junior expressed his pride in the company he co-founded in 1986. Shaw's position within the power, environmental and infrastructure industries would complement CB&I's current business, he said. "While Shaw has been growing in our business and has many opportunities ahead of us, we believe this transaction is in the best interest of and creates significant value for our shareholders, our employees and our customers," he said.

Shaw has engineering, procurement and construction (EPC) contracts for planned new reactors at Summer, Vogtle and Levy in the USA, in a consortium with Westinghouse. The company's nuclear credentials also include extensive contracts for uprate work at US nuclear power plants. Shaw acquired 20% of Westinghouse in 2006 but last year announced that it would be selling its stake back to Toshiba as part of a bid to reduce debt and its foreign exchange exposure.

Researched and written
by World Nuclear News