Wabtec to buy Faiveley Transport for $1.8 billion, including debt
(Reuters) - Wabtec Corp (WAB.N: Quote), which makes components for the transport industry, said it plans to buy France-based Faiveley Transport S.A. (FAIP.PA: Quote) in a cash-and-stock deal valued at $1.8 billion, including debt.
The deal will create one of the world's largest public rail equipment companies, with about $4.5 billion in revenue and a wide presence, Wabtec said on Monday.
Shares of Wabtec, itself formed by the merger of Westinghouse Air Brake Co and MotivePower Industries Corp in 1999, were up 4.6 percent at $95.50 in morning trading.
The company said it has made an "irrevocable" offer to the owners of about 51 percent of Faiveley's shares, who are in discussions with Wabtec.
The 100 euros ($110.60) per share offer price will be payable 25 percent in cash and the rest in Wabtec's preferred stock, said Wabtec, which makes brake equipment, cooling systems and other components.
Wilmerding, Pennsylvania-based Wabtec said it would begin a tender offer for the remaining shares. It will fund the deal with cash on hand, existing credit facilities and potentially other debt financing.
It expects the deal to add to its earnings in 2016. Faiveley Transport, founded more than 90 years ago, generated about $1.2 billion in sales in its most recent fiscal year, Wabtec said.
(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Joyjeet Das)
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