Prysmian's $3bn General Cable deal cleared for US antitrust purposes
Prysmian Group has received effective clearance from the US antitrust authorities to buy rival General Cable in a deal worth approximately $3 billion.
The cable maker announced last month that it had reached a definitive merger agreement under which it will buy 100% of outstanding shares of general cable, subject to regulatory approval.
In this latest development, he firm said that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act applicable to the proposed acquisition of General Cable Corporation expired on March 7, 2018. This means the transaction has been cleared for US antitrust purposes.
The deal now requires further approvals and customary conditions, with Prysmian initially saying it expects to seal the takeover by Q3 2018.
The combined company brings together complementary geographical footprints, which includes increasing the exposure of Prysmian Group to North America. In May, Prysmian Group was awarded a three-year $300 million optical cable supply contract from Verizon Communications, which will see the Group supply more than 17 million fibre km of ribbon and loose tube cables.
“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 said at the time of the original announcement in December.
“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.”
Prysmian Group inaugurated a new optical cable plant in Slatina, Romania, back in June which, as part of a three-year €250 investment plan, the company claims is "the largest of its kind in Europe".
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 optimisation, “with a substantial proportion coming in the first three years,” said Battista in a recent conference call. One-off integration costs are estimated at approximately €220 million.
The combined group will be present in more than 50 countries with approximately 31,000 employees.