Precision Castparts to buy Titanium Metals for $2.9 billion
By A. Ananthalakshmi
(Reuters) - Precision Castparts Corp (PCP.N: Quote) will pay $2.9 billion for Titanium Metals Corp TIE.N, controlled by Texas billionaire Harold Simmons, to expand its portfolio of casting products used in jet engines.
Precision Castparts, whose castings are used in every jet aircraft engine program in production or under development, said the acquisition of the titanium producer will help streamline its supply chain and input costs.
"(Titanium Metals) will provide us with the titanium capability that has always been a key missing piece of our overall product portfolio," Precision Castparts Chief Executive Mark Donegan said in a statement.
Simmons's Contran Corp and affiliates, who hold about 45 percent of Titanium Metals, have agreed to support the deal.
Precision Castparts makes castings, forgings, fastners for aircraft and industrial gas turbines. With the acquisition, it would expand its portfolio to include titanium sponge and melted products that are used in engine and airframe components.
"It is a good acquisition," said Richard Whittington, an analyst with Drexel Hamilton. "Precision Castparts has a long history of handling supplier acquisitions very well and reducing costs."
This is Precision Castparts's biggest acquisition since at least 1996, according to Thomson Reuters data. Continued...