Chicago Bridge & Iron (CB&I) Company and McDermott International, two rather acclaimed U.S. companies specializing in the arenas of engineering, procurement, and construction, have reportedly decided to merge and form a company valued at USD 4 billion on Wall Street. Industry analysts have predicted that this joint venture would essentially aim to earn optimum revenue by focusing more on the offshore as well as onshore projects. As per reliable sources, McDermott, with more emphasis on offshore projects will own fifty three percent stake in the merged firm. It has been forecast that CB&I is going to concentrate more on the onshore projects such as construction activities & events across the LNG, gas power generation, and petrochemical sectors.
Apparently, Chicago Bridge & Iron Company had been facing tougher times earlier, during the period that witnessed a decline in oil costs and the consequent stagnation in the construction activities. On the other hand, McDermott in the past, reportedly, had incurred heavy losses prior to garnering momentum across the Middle East particularly in Saudi Arabia. Reports state that the latter will execute its control over six of the eleven board seats of the merged unit. The chief executive of McDermott is expected to act as the CEO of the merged company while the company’s chairman will function as the non-executive chairperson. It is forecast that the combined firm will recruit nearly forty thousand employees.
Industry professionals are of the view that the merger agreement will result in the integration of two of the most complementary businesses, giving rise to a new onshore-offshore entity that would be highly impacted due to technological innovations. According to authentic sources, the merger is predicted to get finalized in the second quarter of the next year. The current shares of McDermott on Wall Street are estimated at USD 2.16 billion, while the current market value of CB&I is evaluated at USD 1.82 billion.