Italian cables specialist Prysmian Group (Milan; www.prysmian.com) and US-based General Cable (Highland Heights, Kentucky; www.generalcable.com) have agreed to merge, creating a group with sales of more than EUR 11 bn and EBITDA of about EUR 930m. Prysmian will pay General Cable USD 30 per share in cash, valuing the US group at approximately USD 3 bn.

The deal has been unanimously approved by both companies’ board of directors and is expected to close by the third quarter of 2018, subject to regulatory approvals and the usual conditions. The merger must also be approved by General Cable’s shareholders, representing at least a majority of the outstanding shares.

“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,” said Prysmian’s CEO, Valerio Battista, who added that the acquisition was a “landmark moment” for the Italian group. Michael McDonnell, General Cable’s president and CEO, said the combination was an ideal strategic fit and positioned the new group to meet the future opportunities in the dynamic wire and cable industry.

Prysmian expects the combined group to generate run-rate pre-tax cost synergies of approximately EUR 150m within five years of closing the deal. These will come mainly from savings in procurement and overhead costs as well as optimising manufacturing assets. One-off integration costs are estimated at approximately EUR 220m. The new group will be present in more than 50 countries, with approximately 31,000 employees.