McDermott International and CB&I have announced that they will be merging in an all-stock deal valued at US$6 billion to create a fully vertically integrated onshore-offshore company, with a strong presence in high-growth developing regions.
After the deal is completed McDermott shareholders will own 53 per cent and CB&I shareholders will own 47 per cent of the combined company. The value of the transaction is approximately $6 billion, based on the closing share price of McDermott on December 15, 2017.
The deal is expected to close in the second quarter of 2018.
Following the deal, the combined company will be headquartered in the Houston McDermott President and Chief Executive David Dickson will serve as CEO of the combined company, which doesn't yet have a new name.
"Customers worldwide increasingly seek a single company that can offer end-to-end solutions, and the combination of McDermott and CB&I responds to these evolving customer needs by creating a leading vertically integrated company. 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," said David Dickson, president and chief executive officer of McDermott.
In a joint statement, both firms said that together they will have a presence across onshore and offshore, upstream, downstream and power markets, enhancing competitiveness and enabling more consistent, predictable performance through market cycles.
"The combination with McDermott maximises 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. Together, we will have a broadened reach across the entire energy industry that addresses evolving customer needs, along with a much stronger and more flexible financial profile than CB&I would independently, which will benefit all our stakeholders. This unique opportunity to combine with McDermott was presented as we pursued the sale of our Technology and former Engineered Products businesses," said Patrick K. Mullen, CB&I president and chief executive officer.