Houston’s McDermott International touted its rising profits as it nears the completion of its merger with The Woodlands-based CB&I.
Offshore engineering and construction firm McDermott on Monday rejected a hostile takeover bid from European rival Subsea 7, reiterating its commitment to complete its nearly $4 billion merger with financially struggling CB&I in May.
The deal is considered a merger of near equals, but McDermott is the acquiring company and and the combined company will maintain the “McDermott” name and corporate leadership.
Subsea 7 had tried to break up the CB&I deal and acquire only McDermott. There are some concerns that the CB&I deal would weaken McDermott’s value and Subsea 7 emphasized that argument. The McDermott and CB&I shareholders still must approve the deal before the closing.
On its own, McDermott’s $35 million net profit in the first quarter rose 60 percent from a year ago and its $608 million in quarterly revenues jumped 17 percent from the year prior.
McDermott CEO David Dickson said the company is on the right track and will only grow stronger worldwide with the CB&I combination.
“As market conditions improve for our customers, opportunities for the combined organization continue to increase as our customers remain enthusiastic about the vertically integrated solution a combined McDermott and CB&I will offer,” Dickson said.
He noted that the company has identified an additional $100 million in cost savings through the merger, in addition to the previously announced $250 million in annual savings.
“We are excited to complete our transformational combination with CB&I so that we can begin integrating our two companies and deliver on the significant value-creating benefits of the transaction,” Dickson added.
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