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LS Cable Ltd., Seoul, South Korea, is buying Superior Essex, Atlanta, for about $900 million in cash.
The combined company would have consolidated 2007 revenue of $12.8 billion and become the third-largest wire and cable manufacturing company in the world, the companies said.
Under the terms of the agreement, 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. The deal was approved by the boards of both companies, but requires regulatory approval.
“This transaction will make LS Cable a strong global competitor at the forefront of the ongoing wire and cable industry consolidation,” said John Koo, chairman of LS Cable.
LS Cable is a leading wire and cable manufacturer headquartered in Korea. LS Cable has 6,100 employees and more than 25 manufacturing sites located in 12 countries, with operations on three continents. LS Cable was founded in Korea in 1962 and it became a listed company on the Stock Market Division of Korea Exchange (formerly known as Korea Stock Exchange) in June 1977. LS Cable provides a range of energy and telecom cable solutions as well as electronic components and industrial machinery for the energy infrastructure, construction, automotive, railway, telecommunication and electronics industries.
LS Cable has a strong presence in power cable and communications cable, while Superior Essex is one of the world’s largest producers of magnet wire and a leader in the North American communications cable market. LS Cable has an extensive footprint in Asia and the Middle East, which will be complemented by the operations of Superior Essex in North America, Europe and China, the companies said.
Superior Essex, with 4,400 employees and 26 manufacturing facilities in the United States and around the world, manufactures and supplies a broad portfolio of wire and cable products for the communications, energy, automotive, industrial, commercial and residential end-markets. It’s a leading manufacturer of magnet wire, fabricated insulation products, and copper and fiber-optic communications wire and cable. It is also a leading distributor of magnet wire, insulation and related products.
Over the years, Superior Essex acquired many familiar wire and cable brands, including American Moulding, Laribee, Triangle, Royal Electric and Westwire.
The combination is expected to accelerate product introductions into new geographic regions. Additionally, the merger will provide the opportunity for the combined company to realize savings in procurement logistics and expanded vertical integration, the companies said.
Superior Essex will continue to operate under its current name as a wholly-owned subsidiary of LS Cable. Superior Essex 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, the companies said.
LS Cable currently expects that there will be no changes in the operations or workforce of Superior Essex as a result of the transaction and intends to run the company with its existing management and employees. Superior Essex will continue to execute its previously announced global magnet wire factory restructuring activities.
“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 of Superior Essex.
“LS Cable also has a strong R&D program and gives our company increased global scale. 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.”