LS Cable (News - Alert) announced today that it’s signed an agreement to acquire Superior Essex for approximately $900 million.

 

The acquisition is expected to make LS Cable one of the prominent players in the cable industry with portfolio and capabilities in power cable, magnet wire, communications cable and copper rod, company officials say.

 

Industry insiders say that the combined company will be the third largest wire and cable manufacturing company in the world.

 

As per the acquisition agreement – which has been approved by the boards of directors of both companies – Superior Essex shareholders will receive $45 per share in cash, which represents a 50 percent premium over the year-to-date average closing price of Superior Essex common stock.

 

Upon completion of the transaction, Superior Essex will continue to operate under its current name as a wholly-owned subsidiary of LS Cable. Also, the company will maintain its headquarters in Atlanta and its manufacturing and distribution facilities in the United States, Canada, China, France, Germany, Italy, Mexico, Portugal and the United Kingdom.

 

LS Cable officials say they expect no changes in the operations or workforce of Superior Essex as a result of the transaction, and intend to run the company with existing management and employees.

 

John Koo, chairman of LS Cable, said that the transaction will make LS Cable a strong global competitor at the forefront of the ongoing wire and cable industry consolidation, adding that together, “we will have worldwide reach through our diverse network of manufacturing and distribution facilities.”

 

“Bringing our companies together accelerates both companies’ strategic plans and will position us to leverage our operations to drive value and to capture synergies between the two businesses,” Koo said.

 

Christopher Koo, vice chairman and chief executive officer at LS Cable, believes that this combination is a perfect operational and geographic fit. He added: “Together, we will significantly enhance the value we offer to all of our customers, as well as to our employees. I have every confidence that this transaction is the right one.”

 

LS Cable has a presence in power cable and communications cable, while Superior Essex is a producer of magnet wire and has its presence in the North American communications cable market.

 

Thanks to this acquisition, LS Cable, which already has an extensive footprint in Asia and the Middle East, will now expand its operations to North America, Europe and China, according to the company.

 

“This transaction provides fair value to Superior Essex shareholders and is an excellent opportunity to significantly enhance our global expansion and product diversification strategy,” said Stephen Carter, chief executive officer at Superior Essex.

 

He also said that by combining their manufacturing capabilities and product portfolio with our own, “we can better meet the needs of our customers and extend our reach into new and growing end-markets.”