Five months after announcing it was creating a “strategic review,” General Cable has agreed to sell the company to Italian cable group Prysmian for $3 billion. The newly merged company will have the opportunity to see cable in South America, Europe, and now the United States.
“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 chief executive in a statement.
Prysmian will pay about $30 a share for General Cable. When the Kentucky-based company announced it would be creating the strategic review, the stock price was at $16.55 a share.
The transaction, which has been unanimously approved by each company’s Board of Directors and recommended to its shareholders by General Cable’s Board of Directors, 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.
“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,” Battista added.
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 maximizes value for our shareholders.”
Michael T. McDonnell, General Cable President and Chief Executive Officer, said, “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. 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.”
McDonnell continued, “I am extremely proud of our people’s efforts to transform our business over the past several years, including rationalizing the asset base and refocusing on core businesses, streamlining our supply chain, and accelerating profitable growth and innovation in key segments. Today’s announcement is a testament to the team’s hard work and tireless dedication.”
Prysmian expects the combined group to generate run-rate pre-tax cost synergies of approximately €150 million ($177 million dollars) 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 ($261 US dollars).
Tagged with acquisition, General Cable