In a move to add aluminum wire to its electrical offerings, General Cable Corp., Highland Heights, Ky., has agreed to acquire Alcan Cable, the Atlanta-based manufacturer of wire and cable owned by Rio Tinto Plc, for $185 million in cash.
Over the past century, the two companies grew up as competitors on opposite sides of the long-standing debate about copper versus aluminum wire. Copper holds about 78 percent of the U.S. market for insulated wire and cable, according to the Copper Development Association, but aluminum dominates in utility applications such as overhead transmission and distribution cable.
Alcan Cable’s lead brand is its Stabiloy line of feeder cable. The company employs approximately1,050 people in its aluminum cable manufacturing and distribution facilities serving the energy and construction markets in the United States, Canada, Mexico and China. In North America, Alcan has production facilities in Missouri, Pennsylvania, Quebec and Ontario.
General Cable estimates the acquisition will add about $650 million to $700 million in annual revenues at current metals prices, and said in 2011, Alcan Cable reported operating margins in the low single-digit range. In its press release announcing the agreement, General Cable focused quite a bit on Alcan’s new manufacturing facility in China — a 430,000 square foot, vertically integrated manufacturing plant in Tianjin, along with eight regional sales offices.
“I have long admired Alcan Cable and their singular and long standing focus on being superb at their craft,”said Greg Kenny, president and CEO of General Cable, in the release. “Alcan Cable’s Stabiloy and Nual brand names are the gold standard for quality, packaging and service in the North American aluminum cable industry. In addition, they are highly skilled in aluminum rod manufacturing and have built a state-of-the-art facility in China that is successfully penetrating the domestic construction cable market.”
General Cable executives welcomed the inclusion of aluminum wire and cable in the company’s offerings. “The addition of aluminum construction cables further expands the range of products we offer to distributors serving electrical and industrial contractors and increases our capacity to efficiently serve our electric utility customers with transmission and distribution products,” said Greg Lampert, president and CEO of General Cable’s North America unit.