McDermott and CB&I to combine in $6bn mega merger

Texas-based offshore services firms McDermott International and CB&I have agreed to a merger to create a fully integrated onshore-offshore company in a deal worth around $6bn.

McDermott shareholders will end up with a 53% stake in the combined company, which will offer a broad engineering, procurement, construction and installation service platform through McDermott and market leading technology from CB&I.

In an all-stock transaction, CB&I shareholders will receive 2.47221 shares of McDermott common stock for each share of CB&I common stock owned.

David Dickson, president and chief executive officer of McDermott, commented: “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. McDermott has been on a three-year journey that has transformed our company and created a model for delivering sustainable and profitable growth that we believe will unlock value in the near and long term. By applying McDermott’s operational excellence across the combined portfolio, we will be a best-in-class solutions provider driven by consistency in systems, processes, execution and culture. We have great respect for the CB&I team and look forward to working with them to realize significant benefits for our combined shareholders, customers and employees.”

Patrick K. Mullen, CB&I president and chief executive officer, added: “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. Our Supervisory and Management Boards and our management team reviewed multiple strategic options and we ultimately decided this transaction is the best path forward and in the best interest of CB&I, and its shareholders and other stakeholders.”

The board of directors of the combined company will be comprised of 11 members, with five independent directors from McDermott and five from CB&I.

Completion of the transaction has been approved by the boards of both companies and is expected to be closed in the second quarter of 2018.

Grant Rowles

Grant spent nine years at Informa Group based in London, Sydney, Hong Kong and Singapore. He gained strong management experience in publishing, conferences and awards schemes in the shipping and legal areas, working on a number of titles including Lloyd's List. In 2009 Grant joined Seatrade responsible for the commercial development of Seatrade’s Asia products. In 2012, with Sam Chambers, he co-founded Asia Shipping Media.
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