LONDON - The Swedish engineering company Atlas Copco agreed on Monday to buy the British industrial company Edwards Group for up to $1.2 billion.
Under the terms of the deal, Atlas Copco said it had offered investors in Edwards up to $10.50 a share, depending on the British company’s financial performance this year.
The deal represents a 24 percent premium on Edwards’s closing share price on Friday, and will add the British company’s product range of vacuums used in industrial processes to Atlas Copco’s existing offerings of construction and mining equipment.
“It is a great fit for Atlas Copco,†the company’s chief executive, Ronnie Leten, said in a statement on Monday.
The deal for Edwards, whose investors include the private equity firms Unitas Capital and CCMP Capital Advisors, is one of the few bright spots in Europe’s sluggish mergers and acquisitions market.
Despite a recent increase in takeovers, including Vodafone’s $10 billion offering for the German cable operator Kabel Deutschland, the combined value of deals across the Continent is still down more than 40 percent, to $259 billion, compared to same period last year, according to the data provider Thomson Reuters.
That contrasts to a 20 percent increase in the combined value of deals in the United States over the same period.
Atlas Copco, which was founded in 1873 and employs almost 40,000 people around the world, said it would seek to combine Edwards’ vacuums with its own product range of drilling equipment and air compressors for the mining and construction industries. The Swedish engineering giant has faced difficulties in its mining division, as global demand for commodities has remained volatile because of the financial crisis.
Edwards’ investors will initially receive $9.25 for each of their shares of the company, which is listed on the Nasdaq stock exchange. They will receive an additional $1.25 a share depending on Edwards’ financial performance for the rest of the year. In total, the deal is worth $1.6 billion, including debt.
The takeover is expected to close during the first quarter of next year.
