Milan-based Prysmian Group, a global manufacturer of cable for the energy and telecom industries, is acquiring U.S. rival General Cable in a $3 billion deal.
As part of the deal, Prysmian, the world’s largest cable manufacturer by revenue, will pay $30 a share for the Kentucky-based maker of copper, aluminum, and fiber-optic wire and cable products, and assume its $1 billion in debt. The price represents a nearly 38 percent premium to the stock’s close on Friday of $21.8, and is about 81 percent north to the General Cable closing price of $16.55 per share on July 14, when the company announced a strategic review.
General Cable shares were up 34 percent Monday to $29.15 each.
“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 Prysmian Group CEO Valerio Battista said in a statement. “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.”
The deal is still subject to approval from General Cable shareholders, but is expected to close by the third quarter of 2018, according to the companies.
“This combination is an ideal strategic fit and ensures we are well-positioned to meet the future opportunities and challenges in the dynamic and evolving wire and cable industry, General Cable CEO Michael McDonnell commented. “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.”
The merged company would have a presence in more than 50 countries, and approximately 31,000 employees.