Cable makers Prysmian Group and General Cable Corp. have entered into a definitive merger agreement under which Prysmian will acquire General Cable for $30.00 per share in cash. The transaction values General Cable at approximately $3 billion, including debt and certain other General Cable liabilities.
The transaction, which has been approved by each company’s Board and recommended to its shareholders by General Cable, is expected to close by the third quarter of 2018, subject to the approval of General Cable’s shareholders representing at least a majority of the outstanding shares, regulatory approvals, and other customary conditions.
“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 Group CEO.
“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.”
John E. Welsh, III, Non-Executive Chairman of the Board of General Cable, said, “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.”
Michael T. McDonnell, General Cable President and Chief Executive Officer, said, “Together, we will be able to deliver a robust portfolio of products and services and new product innovation across the full breadth of the wire and cable industry globally. Importantly, Prysmian and General Cable have a shared vision and highly compatible cultures founded on similar values.”
Based on pro forma aggregated results for the twelve months ended September 30, 2017, the combined group would have had sales of over €11 billion and adjusted EBITDA of approximately €930 million. The combined group will be present in more than 50 countries with approximately 31,000 employees.
Prysmian expects the combined group to generate run-rate pre-tax cost synergies of approximately €150 million within five years following closing mainly from procurement, overhead costs savings and manufacturing footprint optimization. One-off integration costs are estimated at approximately €220 million.
The transaction is expected to generate EPS accretion1 in the range of 10-12% for Prysmian shareholders already within the first year following closing (excluding cost synergies and before related implementation costs).