Chicago Bridge & Iron has entered into a definitive agreement to acquire Shaw Group. Shaw Group is a Fortune 500 company, primarily servicing customers in the power generation and the government services sector. The acquisition is anticipated to close early next year.
Combined, CB&I and Shaw will create a complete energy focused technology, engineering, procurement, fabrication, construction, maintenance and associated services company. The company will have a global workforce of almost 50,000 employees, backlog of over USD$28 billion and facilities located strategically on all continents.
CB&I will acquire Shaw for USD$46.00 per share in cash and stock and shareholders will receive USD$41.00 in cash and USD$5.00 in CB&I equity for each share of Shaw stock at closing. To finance the acquisition, CB&I will use cash on the balance sheets of both companies and USD$1.9 billion in debt. This is equal to an enterprise value of about USD$2.0 billion, based on the estimated cash position of Shaw at the end of the August 31st, 2012 fiscal year.
The Directors of both company’s boards have unanimously approved the acquisition and the transaction is subject to shareholders approval from both companies, as well as regulatory approvals and other customary closing conditions. Philip K. Asherman will continue on as President and CEO of the combined company.
Shaw will be operated as a business sector under the CB&I Shaw brand name which will allow the company to retain Shaw’s brand equity and allow the combined company to capitalize on resources, capabilities and best practices from each group.