Blog Exposure - Italian cable manufacturer Prysmian Group acquires US General Cable in an all cash deal valued at $3 Billion

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LONDON, UK / ACCESSWIRE / December 06, 2017 / Active-Investors issued a free report on General Cable Corp. (NYSE: BGC), which is readily accessible upon registration at www.active-investors.com/registration-sg/?symbol=BGC as the Company's latest news hit the wire. On December 04, 2017, Prysmian Group announced that it has signed a merger agreement to acquire General Cable. The all-cash transaction is valued approximately at $3 billion including General Cable's debt and liabilities. The Board of Directors of both companies have approved the deal. The merged Company is expected to strengthen Prysmian's market position as well as expand its global footprint. Sign up now for our free research reports at:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, General Cable most recent news is on our radar and we have decided to include it on our blog post. Today's free coverage is available at:

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The terms of the merger agreement

As per the terms of the merger agreement, Prysmian has agreed to pay $30 in cash for each General Cable's share. The offer price represents a premium of approximately 38% of General Cable's share price of $21.80 at the close of trading on December 01, 2017.

The deal is expected to be completed in Q3 2018 and is subject to receipt of regulatory approval and other closing conditions. The deal also requires that a majority of General Cable's shareholders vote in favor of the transaction.

Prysmian has already put in place a financing plan for the acquisition which includes use of cash in hand and fresh debt. Prysmian has received a commitment from its lenders for the completion of the deal.

Commenting on the acquisition, Valerio Battista, CEO of Prysmian, 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."

Michael T. McDonnell, President and CEO of General Cable, added:

"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."

Benefits of the deal

Prysmian expects that the merged entity would have sales of over €11 billion and adjusted EBITDA of approximately €930 million, based on the pro-forma aggregated results for the twelve months ended on September 30, 2017. The merged company will have a wider global presence in over 50 countries and supported by a team of approximately 31,000 employees.

Prysmian expects that the merger will result in run-rate pre-tax cost synergies of approximately €150 million within five years of closing of the transaction. These synergies would arise from procurement, overhead costs savings, and manufacturing footprint optimization. The deal will result in a one-time integration cost of approximately €220 million.

The deal is expected to be accretive to Prysmian's earnings by 10% to 12% within the first year of the closing of the deal. This is calculated after excluding cost synergies and before including implementation costs.

For the Prysmian, General Cable may not be a great buy in terms of cash flows or financial returns. General Cable has been on a financial decline since the last few years and has been under investigation by the US Securities and Exchange Commission (SEC) as well as US Department of Justice (DOJ) for payment of bribes in foreign countries as well as its unethical accounting practices. The matter was resolved with SEC and DOJ after the Company paid fines totaling $82.3 million in December 2016. General Cable had announced in July 2017 that the Company planned to explore strategic alternatives to unlock shareholder value. Since then it has been looking for interested partners.

Prysmian sees great opportunity in the future in North America where there is a major shift towards solar and wind energy which would increase the demand for wires and cables to be connected to the main grids. The increased use for telecommunication and internet usage will also boost the need for fiber-optic cables in these markets. The deal will allow Prysmian to get a competitive advantage in the cut-throat cable industry.

About Prysmian Group

Milan, Italy based Prysmian is a global leader in the supply, installation, and development of energy and telecom cables and systems. It is a truly public Company with nearly 140 years of experience. The Prysmian reported sales of over €7.5 billion in FY16. It has a global presence across 50 countries and 82 plants and is supported by a team of 21,000 employees.

About General Cable Corp.

Highland Heights, Kentucky based General Cable is one of the largest wire and cable manufacturers in the world with a rich history of over 170 years. The Company is engaged in the development, design, manufacture, marketing and distribution of aluminium, copper and fiber optic wire and cable products for the energy, communications, transportation, industrial, construction and specialty segments. The Company operates manufacturing facilities in its core geographical markets and has worldwide sales representation and distribution.

Stock Performance Snapshot

December 05, 2017 - At Tuesday's closing bell, General Cable's stock rose 1.36%, ending the trading session at $29.85.

Volume traded for the day: 14.91 million shares, which was above the 3-month average volume of 1.46 million shares.

Stock performance in the last month – up 44.90%; previous three-month period – up 77.15%; past twelve-month period – up 54.66%; and year-to-date - up 56.69%

After yesterday's close, General Cable's market cap was at $1.49 billion.

The stock has a dividend yield of 2.41%.

The stock is part of the Industrial Goods sector, categorized under the Industrial Equipment & Components industry.

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