Alfa Laval has agreed to buy Neles in a deal that values the valve maker at roughly $2 billion, setting a price that could potentially fight off any counter bids.
After striking a ‘combination agreement’ with Neles, Alfa will make a voluntary recommended public cash tender offer for all issued and outstanding shares, excluding those held by Neles or any of its subsidiaries. Neles’ shareholders will be offered 11.50 euros in cash per share, representing a premium of 33% compared with recent closing prices. The proposed deal comes as Neles faces other signs of interest from potential buyers.
Neles is the former flow control unit of Metso, which became a separate company on July 1, when Metso’s minerals unit merged with Outotec to create Metso Outotec. Alfa Laval said it has identified the industrial flow control market as a key growth area, and that with the transaction, it can “considerably strengthen its presence in the large industrial flow control space,” where it now offers mainly energy efficiency solutions.
“The proposed deal offers a strong industrial logic: Our businesses complement each other well with very little overlapping operations,” Alfa Laval’s Chief Executive Officer Tom Erixon said in the statement. “The match is nearly perfect.”
The deal will be financed by Alfa Laval’s own funds and debt facilities from SEB, and is subject to regulatory approvals.
Image credit: Alfa Laval and Neles