CB&I to buy Shaw Group in $3bn deal

30 July 2012

The Shaw Group Inc. announced, 30 July, that it has signed a definitive merger agreement with CB&I valued at approximately $3 billion. The merger of the CB&I and Shaw will create one of the world's largest engineering and constuction companies focused on the global energy industry, it said.

Under the terms of the agreement, CB&I will acquire Shaw for $46.00 per share in cash and stock. Shaw’s shareholders will receive $41.00 in cash and $5.00 in CB&I equity (0.12883 shares based on an agreed upon recent average stock price of $38.81 per share) for each share of Shaw stock at closing.

"Both companies believe this agreement will create value through a combined company with broader participation in a robust energy market," Shaw said in a statement.

Shaw has been involved in nuclear power plant design and construction for over 60 years, participating in projects in China and the United States. It is currently working with partner Westinghouse on building four AP1000 reactors at Samen and Haiyang in China, providing engineering, procurement, start-up, information management, technology transfer and project management services.

In the United States, Shaw has been awarded project management, engineering, procurement and construction (EPC) contracts for new US AP1000 plants at the Vogtle site near Waynesboro, Ga and the V.C. Summer site in South Carolina. The company is also the largest provider of commercial nuclear power plant maintenance and modification services in the country, with contracts for more than 40% of operating units. It has also carried out more than 60 uprate studies and projects, adding 3.5GW of new capacity to the US power grid.

CB&I plans to operate Shaw as a business sector under the brand name CB&I Shaw to enable the company to retain Shaw’s brand equity and to allow the combined organization to capitalize on the resources, capacity and best practices from each group for the benefit of all stakeholders.

“Shaw is a great company with tremendously talented employees. By adding them into the CB&I family, we will become fully diversified across the entire energy sector,”said Philip K. Asherman, president and chief executive officer of CB&I.

The transaction has been approved unanimously by the boards of directors of both companies. Closing of the transaction is subject to regulatory approvals, the approval of Shaw and CB&I shareholders and other conditions. The transaction currently is expected to close during the first calendar quarter of 2013.


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