Reuters: Global Markets: CB&I to buy Shaw Group for $3 billion

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CB&I to buy Shaw Group for $3 billion Jul 30th 2012, 12:49 Mon Jul 30, 2012 8:49am EDT (Reuters) - Chicago Bridge & Iron Co (CBI.N) said on Monday that it would buy Shaw Group Inc (SHAW.N) for about $3 billion in cash and stock to create a big engineering and construction company focused on the energy industry. Netherlands-based CB&I offered $46 per share - $41 in cash and $5 in stock - a premium of 72 percent to Shaw's closing price on Friday, the companies said. Shaw stock jumped 65 percent to $44.05 in premarket trading, while CB&I fell 8.5 percent to $37.25. Shares of other engineering stocks also rose. Fluor Corp (FLR.N) gained 4.4 percent, and Foster Wheeler AG (FWLT.O) was up 7.3 percent. Baton Rouge, Louisiana-based Shaw provides engineering, construction and maintenance services to oil companies, manufacturers, and utilities. It recorded 2011 sales of $5.9 billion and employs about 27,000 people. CB&I, whose clients include energy companies like Chevron Corp (CVX.N) and Exxon Mobil Corp (XOM.N), said it would use cash on the balance sheets of both companies, along with about $1.9 billion in debt, to finance the acquisition. The deal will add to earnings in the first year, CB&I said, adding that it plans to expand in areas such as nuclear, gas and coal power generation. Shaw will continue as a business segment branded as CB&I Shaw. Shaw Chief Executive Officer J.M. Bernhard Jr. will leave after the deal closes in early 2013, and CB&I CEO Philip Asherman will lead the combined company. Bank of America Merrill Lynch (BAC.N) is the financial advisor to CB&I. Morgan Stanley & Co LLC (MS.N) is Shaw`s exclusive financial advisor. (Reporting by A. Ananthalakshmi in Bangalore and Nick Zieminski in New York; Editing by Gerald E. McCormick and Lisa Von Ahn) Link this Share this Digg this Email Reprints

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