McDermott International Inc. and CB&I agreed Monday to combine in an all-stock transaction worth an estimated $6 billion, a move that would narrow the energy engineering and construction competition.

The oilfield services giants, each a leader in engineering, procurement, construction and installation, or EPCI, combined would have proforma revenue approaching $10 billion and a backlog estimated at $14.5 billion.

Under terms of the friendly merger, Houston-based McDermott, a major offshore supplier, would own 53%, while CB&I, formerly Chicago Bridge & Iron, headquartered north of the city in The Woodlands, would own 47%.

Together, McDermott and CB&I would have a presence across onshore and offshore, upstream, downstream and in power markets.

“Customers worldwide increasingly seek a single company that can offer end-to-end solutions, and the combination of McDermott and CB&I responds to these evolving customer needs by creating a leading vertically integrated company,” said McDermott CEO David Dickson.

“This transaction combines two highly complementary businesses to create a leading onshore-offshore EPCI company driven by technology and innovation, with the scale and diversification to better capitalize on global growth opportunities.”

McDermott has been on a “three-year journey” to transform the company and create a model to deliver profitable, long-term growth, he noted.

CB&I CEO Patrick K. Mullen said the combination would provide “a broadened reach across the entire energy industry that addresses evolving customer needs, along with a much stronger and more flexible financial profile than CB&I would independently, which will benefit all our stakeholders.”

Most of CB&I revenues come from the United States, including from liquefied natural gas (LNG) and petrochemical projects, while McDermott business centers around global offshore facilities. McDermott is involved in, among other things, floating LNG projects and major deepwater infrastructure that includes Jack-St. Malo and Julia installations in the Gulf of Mexico.

CB&I’s U.S. portfolio portfolio includes several U.S. LNG export terminals and affiliated infrastructure: Cameron in Hackberry, LA; Dominion Cove Point in Lusby, MD; Elba Island in Savannah, GA; and Freeport on Quintana Island, TX. It also is engineering two LNG peak shaving facilities in Memphis and Waterbury, CT. In addition, CB&I is overseeing the Magnolia tension leg platform in the Gulf of Mexico, the Oxy Ingleside ethylene project in South Texas; and the Sunoco Marcus Hook natural gas liquids facility in Pennsylvania.

The opportunity to combine with McDermott came about as CB&I pursued the sale of its technology and former engineered products businesses, Mullen said. Management reviewed “multiple strategic options and we ultimately decided this transaction is the best path forward and in the best interest of CB&I, and its shareholders and other stakeholders.”

The combined company would be able to offer customers engineered and constructed facility solutions and fabrication services across the full lifecycle in refining, petrochemicals, liquefied natural gas and power.

By retaining CB&I’s technology business, with its 3,000 patents and patent application trademarks and more than 100 licensed technologies, the combined company would be one of the world’s largest providers of licensed process technologies.

The transaction also is expected to be cash accretive, excluding one-time costs, within the first year after closing. Annualized cost synergies are estimated at $250 million in 2019, in addition to a $100 million cost reduction program that CB&I expects to have fully implemented by the end of this year.

Following completion of the transaction, the combined company is to remain headquartered in the Houston area. Dickson is serving as CEO and president, while McDermott CFO Stuart Spence would continue as financial chief. Mullen would remain with the combined company for a transition period to ensure integration. Operational leadership is to include representatives from both companies.

The board would comprise 11 members, including 10 independent directors and Dickson. Five of the directors would come from McDermott and five from CB&I. McDermott’s nonexecutive Chairman Gary P. Luquette is to continue in that role once the merger is completed.