McDermott-CB&I merger clears antitrust hurdle in U.S.

A merger transaction between McDermott and CB&I, estimated to be worth about $6 billion, has cleared an antitrust hurdle in the U.S. with early termination of Hart-Scott-Rodino (HSR) waiting period. 

McDermott and CB&I on Thursday informed that the U.S. Federal Trade Commission (FTC) has granted early termination of the waiting period under the HSR Antitrust Improvements Act of 1976, as amended, with respect to their proposed combination.

According to information on FTC’s website, the HSR act, amending the Clayton Act, requires companies to file premerger notifications with the FTC and the Antitrust Division of the Justice Department for certain acquisitions. The act establishes waiting periods that must elapse before such acquisitions may be consummated and authorizes the enforcement agencies to stay those periods until the companies provide certain additional information about the likelihood that the proposed transaction would substantially lessen competition in violation of Section 7 of the Clayton Act.

The act also requires a filing fee which is evenly divided between and credited to the appropriations of the FTC and the Antitrust Division.

As announced in December 2017, McDermott and CB&I have agreed to combine in an all-stock transaction to create a fully vertically integrated onshore-offshore company with an enterprise value of approximately $6 billion.

Under the terms of the proposed combination, upon completion, McDermott stockholders will own approximately 53 percent of the combined company on a fully diluted basis and CB&I shareholders will own approximately 47 percent.

McDermott noted that the combination still remains subject to regulatory clearance in Russia, approval by McDermott’s and CB&I’s shareholders, completion of financing, and other closing conditions.

The transaction is expected to be completed in the second quarter of 2018. Following completion of the transaction, the combined company will be headquartered in the Houston area.

David Dickson, current President and Chief Executive Officer of McDermott, will be President and Chief Executive Officer of the combined company, and Stuart Spence, current Executive Vice President and Chief Financial Officer of McDermott, will be Executive Vice President and Chief Financial Officer of the combined company.

Offshore Energy Today Staff