News Alert: Shaw Group agrees to sell for $3.04 billion

Published Jul 30, 2012 at 9:00 am (Updated Jul 30, 2012)

The Chicago Bridge & Iron Co. has agreed to acquire The Shaw Group Inc. for $3.04 billion in cash and stock as the energy infrastructure construction company looks to diversify its offerings in growth areas like power generation. According to The Wall Street Journal's Market Watch, the move diversifies CB&I's handle on the energy sector, from power generation to LNG, from refining to gas processing, from offshore to oil sands, says CB&I Chief Executive Philip K. Asherman. Shaw had seen its revenue decline for over two years before the trend turned around late last year; its businesses range from restoration of contaminated land to construction of military housing. Shaw had said its power segment started to benefit from U.S. nuclear projects, though at a slower-than-expected rate. It anticipates contributions from those projects throughout the fiscal year. Shaw holders will receive $46 a share, a 72% premium over Friday's closing price. The stock surged 70% to $45.34 pre-market and briefly topped the offer price, suggesting investors might have been expecting a higher bid. Shares last traded above the offer price in summer 2008. Shaw had almost 66 million shares outstanding as of July 5. To read more, click here.