The Shaw Group Inc. completed the $290 million sale of its Energy and Chemicals business to Technip on Friday.
The Energy and Chemicals sale also helps Shaw of Baton Rouge meet one of the requirements for Shaw to eventually be acquired by CB&I — having at least $800 million in cash.
CB&I, of The Woodlands, Texas, with its parent company in the Netherlands, is buying Shaw, a major engineering, construction and fabrication company, for about $3 billion. That deal was announced in July.
Shaw and Technip announced their deal on May 21, and the sale of the Energy and Chemicals unit was expected to close by the end of August. The unit researches, develops, designs and commercializes a wide range of refinery, petrochemical and chemical processing units.
Technip is a Paris-based offshore oil and gas exploration firm that employs about 30,000 workers in 48 countries. It operates a fleet of specialized vessels for pipeline installation and sub-sea construction.
The Energy and Chemicals unit sale will give Shaw an adjusted cash balance of around $1.3 billion, according to previous company statements.
CB&I Chief Executive Officer Phillip K. Asherman had said that CB&I had been looking at Shaw for a couple of years.
Asherman said Shaw’s decision to sell its Energy and Chemicals Group and to sell its 20 percent ownership of Westinghouse — both of which have been a drag on earnings — made Shaw more attractive. Shedding the Energy and Chemicals unit also removes some of the overlap with CB&I’s existing business, he said.
The combined company will be one of the largest in the Western hemisphere with annual revenue of more than $11 billion, a project backlog of more than $28 billion and around 50,000 employees, Asherman said.
The Shaw-CB&I deal is expected to increase 2013 earnings per share by 10 percent or more, he said. CB&I will finance the deal with some of its own cash, some of Shaw’s and $1.9 billion in debt.