The deal will give Prysmian a valuable launching platform to increase its exposure to the US cabling sector
Cabling firm Prysmian is set to acquire its US based rival, General Cable, in a deal worth $3 billion (£2.25 billion).
“The acquisition of General Cable represents a landmark moment for Prysmian Group and a strategic and unique opportunity to create value for our shareholders and customers,” said Valerio Battista, Prysmian’s chief executive in a statement.
The deal values General Cable at around $30.00 (£22.50) per share and has been unanimously ratified by both boards.
Since General Cable announced its strategy review on 14th July 2017, the company has seen an 81% surge in its share price, rallying from $16.55.
“Today’s announcement is the culmination of a thorough and robust review of strategic alternatives undertaken by the General Cable Board of Directors. We are confident that this transaction maximises value for our shareholders,” John E. Welsh, III, non-executive chairman of the board of General Cable.
The deal between the two firms is expected to close in the third quarter of 2018. The deal will provide Italian based Prysmian with a strong foothold in the US market as it looks to expand its operations.
“Through the combination of two of the premier companies in the cable industry we will be enhancing our position in the sector, by increasing our presence in North America and expanding our footprint in Europe and South America,” said Battista.
Prysmian estimates that one off integration costs will hit $260 million (£194 million).