General Cable Corporation to Acquire Alcan Cable, the Wire and Cable Business of Rio Tinto plc for $185M
General Cable Corporation (NYSE: BGC) (the Company) announced today that it has agreed to acquire Alcan Cable, the wire and cable business of Rio Tinto plc (Rio Tinto) (NYSE: RIO). The purchase price is $185 million in cash, subject to customary adjustments primarily related to working capital levels at closing as provided in the definitive purchase agreement. The Company expects to use its Asset Based Revolving Credit Facility to principally fund the transaction. The transaction is expected to close in the second half of 2012, subject to receipt of regulatory approval.
Alcan Cable employs approximately 1,050 associates in its aluminum cable manufacturing and distribution facilities servicing the energy and construction markets in the United States, Canada, Mexico, and China. In 2011, Alcan Cable reported operating margins in the low single digit range. On an annual basis, the Company estimates the acquisition will contribute approximately $650-700 million in revenues at current metal prices. Over a cycle, Alcan Cable's operating margin profile is expected to be consistent with the Company's existing North American businesses as manufacturing, logistics, and purchasing synergies are realized. With these synergies, an improving North American market and an accelerating greenfield operation in China, the transaction is expected to create shareholder value in the near term.
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