McDermott International and Chicago Bridge & Iron to Merge

McDermott International (NYSE: MDR) and Chicago Bridge & Iron Company (NYSE: CBI) announced yesterday that they would merge in a transaction valued at $6 billion to create a fully vertically integrated onshore-offshore engineering, procurement, construction, and installation (EPCI) company. The new company, of which McDermott shareholders will own 53% and CBI shareholders will own 47%, will generate approximately $10 billion in revenues and will have backlog of approximately $14.5 billion.

McDermott offered 2.47221 of its shares for every CBI share held, representing a 3% premium to CBI’s closing price on Monday. The transaction is expected to be cash accretive, excluding one-time costs, within the first year after closing and is expected to generate cost synergies of $250 million in 2019. Significant revenue synergies are also expected.

David Dickson, McDermott’s President and CEO, will become President and CEO of the new company.

​The transaction is expected to close in the second quarter of 2018 and is subject to regulatory antitrust approval as well as shareholder approval from both companies.