The businesses are said to be non-core to the company’s long-term strategic objectives. Credit: Keith Ewing.

McDermott International has unveiled plans to sell its storage tank and US pipe fabrication businesses following a strategic review of its portfolio.

The review is part of an integration process resulting from its combination with engineering, procurement and construction (EPC) company CB&I in May.

McDermott decided to pursue the sale after determining that the businesses are non-core to its long-term strategic objectives and they offer limited pull-through or cross-selling opportunities.

McDermott International president and CEO David Dickson said: “These operations continue to perform well and offer competitive differentiation on a standalone basis in their respective markets, particularly global LNG and US petrochemicals.

“These operations continue to perform well and offer competitive differentiation on a standalone basis in their respective markets.”

“The tank business, in particular, is known as a world leader in its served markets. Our intent would be to seek the kinds of owners who would value the significant long-term growth potential of each business and who would thus provide attractive prospects for employees and customers.”

Total revenues from the two businesses for last year stood at $1.5bn. The businesses have combined workforce of 5,350 employees.

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The company expects to realise more than $1bn from the divestment and intends to complete the transactions next year.

A majority of the proceeds will be used to reduce the debt under the company’s $2.25bn term loan.

Despite the sale, McDermott will continue to operate its fabrication yards in Mexico, Indonesia, the UAE, Saudi Arabia and China.

The company believes that these facilities fit its vertically integrated model as they can deliver fully modularised and complete facilities for offshore and onshore projects.