Energy engineering giants McDermott International Inc. and Chicago Bridge & Iron Co. NV (CB&I), which agreed to merge last December, announced steps Tuesday to integrate operations and set the leadership structure once the combination is completed as expected by mid-year.
"The plans announced...are important steps to position the combined company to build a common culture, better serve our customers, become more competitive and drive long-term growth," said McDermott CEO David Dickson, who is to lead the combined company.
"We will partner with our customers to provide integrated, end-to-end solutions -- from the wellhead to the storage tank -- that deliver the quality, efficiency and dependability needed to keep their businesses growing."
The all-stock transaction, worth an estimated $6 billion, would narrow the global energy engineering and construction competition. The companies each are leaders in engineering, procurement, construction and installation, or EPCI. Combined the company would have proforma revenue that in December approached $10 billion with a backlog estimated at $14.5 billion.
Houston-based McDermott, a major offshore supplier, would own 53% of the revamped company, while CB&I, headquartered north of the city in The Woodlands, would own 47%.
The combined operations are to be organized by four areas: North, Central & South America (NCSA); Europe, Africa, Russia & Caspian (EARC); Middle East & North Africa (MENA); and Asia Pacific (APAC). CB&I's technology business would remain a Tier One market facing offering.
McDermott CFO Stuart Spence would continue in his role for the combined company. NCSA would be headed by Richard Heo, currently executive vice president (EVP) of CB&I’s fabrication services, while EARC would be run by Tareq Kawash, who now is CB&I’s group vice president of engineering and construction international. McDermott Vice President Ian Prescott is taking over as head of APAC, while Linh Austin would become head of MENA; he currently is McDermott’s vice president of the Middle East and Caspian.
CB&I’s Daniel McCarthy, who serves as EVP of technology, also would head technology for the combined company.
The transaction still needs to tie up loose ends. Before completion, it needs to be cleared under Russian competition laws, approved by each company’s shareholders and complete financing arrangements.