ABB to Sell Lummus for $950 Million
Monday August 27, 7:52 am ET
Swiss Engineering Giant ABB to Sell Lummus Global to CB&I for $950 Million
ZURICH, Switzerland (AP) -- ABB Ltd. will sell its oil and gas production plant Lummus Global to the Chicago Bridge & Iron Company for $950 million, the Swiss engineering company said Monday.
The buyout, subject to approval by regulators and CB&I shareholders, is expected to close in the fourth quarter, ABB said.
"The divestment of Lummus Global is the final milestone in our strategy of focusing on our highly successful core business in power and automation technology," ABB President and CEO Fred Kindle said in a statement.
Shares in ABB were up 1.1 percent at 28.60 Swiss francs ($23.83) in Zurich trading Monday.
Lummus Global provides proprietary process technologies, project management, engineering and procurement services to the oil and gas industry. It has 2,400 employees and reported sales of $988 million last year.
ABB noted that it has discovered "certain suspect payments in a number of countries" in connection with the sale of Lummus, which it has reported to the U.S. Department of Justice and the Securities and Exchange Commission. Parallel internal investigations are ongoing, ABB said.
Lummus was involved in ABB's decade-long courtroom battle in the United States with people who claimed to have been exposed to asbestos in its products. The lawsuits were settled in 2006. ABB has been recovering since and implemented a successful restructuring plan after posting losses in 2000 and 2004.
ABB posted a nearly doubled second-quarter profit last month. Net profit in the three months through June rose to $729 million, compared with $367 million in the same period a year ago, the company said at the time, adding that demand was robust in all its businesses and in all regions.
Shares of Texas-based CB&I closed at $38.18 Friday. It's shares have traded in a 52-week range of $22.98 and $44.84. |
