CB&I energy construction giant will sell its Stone & Webster nuclear construction business to the Westinghouse Electric Co. for $229 million.
CB&I, which operates out of The Woodlands but is formally based in the Netherlands, reported well more than $2 billion in 2014 revenues from its nuclear business. Conflicts and delays have arisen from major nuclear construction projects in Georgia and South Carolina on which Westinghouse is a partner. Outside of projects in China, CB&I has expressed some concerns about the lack of new nuclear projects on the drawing board.
“This transition is a positive development for all stakeholders in the current nuclear projects as it provides, through Westinghouse, a single focus of responsibility and accountability for the completion of the AP1000 (nuclear reactor) units,” said CB&I President and CEO Philip Asherman in a prepared statement. “For CB&I shareholders, it provides clarity and increased predictability from our growing backlog of work in markets that are more strategic to our future growth.”
CB&I said it will focus its growth on liquefied natural gas, petrochemicals and fossil fuel power construction projects.
Pennsylvania-based Westinghouse, a subsidiary of Japan’s Toshiba, said it is negotiating with Irving-based Fluor Corp. as its nuclear construction partner for the future.
The deal is expected to close in the fourth quarter. CB&I would receive $161 million upon the substantial completion of pending projects and the remaining $68 million once milestones are reached on equipment and services on a subcontract basis.
CB&I said it will incur up to a $1.2 billion impairment charge on the deal, of which $904 million will be recorded in the third quarter. CB&I is releasing its third-quarter earnings on Nov. 5. CB&I said it expects to report $164 million in adjusted net income for the quarter, which is a slight gain from $162 million last year.
CB&I first acquired the Stone and Webster nuclear construction business as part of its $3 billion acquisition of The Shaw Group in 2012. Shaw bought Stone & Webster at auction for $150 million after the company was financially crippled by an Indonesian bribery scandal. The business was built up and Technip purchased the Stone & Webster process technologies division from Shaw in early 2012.