Italy's Prysmian to buy General Cable in $3bn deal

Italian cable maker Prysmian Group has agreed to buy US rival General Cable in a deal that values the company at around $3bn including debt and other liabilities.

Under the terms of the agreement, Prysmian will pay $30.00 per share in cash, which represents a premium of around 81% to the closing price of General Cable on 14 July. The deal has been unanimously approved by the boards of both companies and is expected to close by the third quarter of next year subject to the approval of General Cable’s shareholders.

Prysmian chief executive officer Valerio Battista said: "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.

"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.”

Based on pro forma aggregated results for the twelve months to the end of September 2017, the combined entity would have had sales of more than €11bn and adjusted earnings before interest, taxes, depreciation and amortisation of approximately €930m. The combined group will be present in more than 50 countries with approximately 31,000 employees.

Prysmian said it expects the combined group to generate run-rate pre-tax cost synergies of about €150m within five years following closing mainly from procurement, overhead costs savings and manufacturing footprint optimisation.

At 1445 GMT, General Cable shares were up 34% to $29.22 and Prysmian shares were down 3.1% to €27.61.