General Cable Corp. (NYSE: BGC) is acquiring Alcan Cable, the wire and cable business of Rio Tinto Plc (LSE: RIO) (NYSE: RIO) for $185 million in cash to boost its presence in areas of electricity transmission and distribution.
The Highland Heights, Kentucky-based company is engaged in the development of copper, aluminum, and fiber optic wire and cable products for use in the energy, industrial, construction, specialty, and communications markets worldwide.
General Cable expects the deal to create shareholder value in the near term and contribute around $650 million to $700 million in annual revenue at current metal prices.
In 2011, Alcan Cable posted operating margins in the range of low single digit. Over a cycle, General Cable expects Alcan Cable's operating margin profile to be consistent with its existing North American businesses as manufacturing, logistics, and purchasing synergies are realized.
"The addition of Alcan Cable Mexico combined with our existing manufacturing capability in the country further enhances our ability to service the Mexican market," said Mathias Sandoval, President and Chief Executive Officer, General Cable Rest of World.
BGC ended regular trading at $27.06 on Friday.