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September 3, 2007
Volume 85, Number 36
p. 8


Lummus Global on the Move

Purchase by CB&I gives firm greater expertise in chemicals, oil, and gas

William Storck

CHICAGO BRIDGE & IRON is buying Lummus Global from Swiss engineering company ABB for $950 million. Lummus provides process technologies to the oil, gas, and petrochemical industries and furnishes engineering, procurement, and construction (EPC) services. CB&I is a Netherlands-registered company but has its administrative headquarters in The Woodlands, Texas.

Lummus provided engineering and procurement services for several units at the SECCO petrochemical complex in Shanghai.

Lummus has about 2,400 employees and had revenues of $988 million last year. The company claims 70 proprietary technologies, more than 1,000 patents, and an established global presence that includes Europe, the Middle East, Africa, China, Russia, and the U.S.

ABB says it is selling Lummus to focus on power and automation technology. The Swiss firm was in negotiations to sell Lummus several years ago and thought the deal would be wrapped up in 2004. However, issues involving Lummus' asbestos liabilities cropped up and weren't settled until last year.

The sale will be the third change of ownership this year for an engineering firm catering to the chemical industry. In July, Air Liquide purchased Lurgi from Global Engineering Alliance. And in April, Halliburton spun off its KBR unit to Halliburton shareholders.

CB&I CEO Philip K. Asherman calls the purchase "a compelling strategic opportunity which will enable CB&I to better respond to the growing demand for energy infrastructure around the world." He says the acquisition transforms CB&I into a "fully integrated provider with full-scale capabilities in the global hydrocarbon sector."

According to CB&I, the combination of its EPC experience and Lummus' technology expertise will provide clients with a full range of services across the hydrocarbon value chain. These include proprietary technology, engineering, procurement, fabrication, construction, and final plant commissioning.

Even with asbestos issues out of the way, the deal was evidently not without its surprises. According to ABB, in connection with the Lummus divestment, it discovered certain "suspect payments" in a number of countries. ABB has not specified the nature of these payments but has reported them to the Department of Justice and to the Securities & Exchange Commission. It says it is cooperating fully with the authorities and is continuing its internal investigations and compliance reviews.

Chemical & Engineering News
ISSN 0009-2347
Copyright © 2011 American Chemical Society

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