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Chicago Bridge & Iron to buy Shaw Group for $3.04B

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Posted: Jul 30, 2012 10:14 AM
Updated: Jul 30, 2012 11:52 AM
Source: Associated Press

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Topics: shaw group, baton rouge, purchase, bought, chicago bridge & Iron, CB&I

BATON ROUGE - Chicago Bridge & Iron Co. says it has agreed to buy Baton Rouge-based Shaw Group Inc. for about $3.04 billion in cash and stock.

The company, also known as CB&I, says the addition of Shaw will create one of the most complete companies building equipment to tap energy sources.

"I am extremely proud of the company we have built and operated for the last 25 years," said J.M. Bernhard Jr., chairman, president and chief executive officer of Shaw. "Shaw's leadership position in the power, environmental and infrastructure industries will complement CB&I's current business, and I am confident that, together, these two companies will continue to excel."

Secretary Stephen Moret with Louisiana Economic Development said CB&I indicated they plan to leave Shaw's headquarter in Louisiana, and run the company as a subsidiary.

"We think there is the potential for significant job growth in Louisiana as a result of the acquisition, particularly in engineering jobs in Baton Rouge and expanded modular fabrication activity in Lake Charles," Moret said. "We plan to explore a variety of growth opportunities with CB&I in the near future."

Under the deal, Shaw shareholders will receive $41 in cash and CB&I stock worth about $5 for each of their Shaw shares. That represents an about 72 percent premium over Shaw's Friday closing stock price.

Shaw shares jumped 68 percent in premarket trading Monday. CB&I expects the deal to boost its earnings per share by double-digits in the first year before transaction-related costs.

The deal has been approved by both companies' boards, but remains subject to shareholder approval. It's expected to close in early 2013.

For more on the acquisition, click here to watch a CB&I webcast discussing the purchase.

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