French cable maker Nexans plans to buy Dutch rival Draka for $1 billion

The world' s largest cable manufacturer France' s Nexans said yesterday that it plans to acquire Dutch rival Draka Holding NV for approximately €730 million ($1.02 billion) to strengthen the company' s position in speciality cables and improve its competitiveness.

Nexans has gained the support of investment firm Flint Beheer BV, Draka' s largest shareholder with around 48.5-per cent stake, if it makes an offer to acquire Draka, the company said in a statement.

The French cable maker plans to make a cash offer to purchase all of the 48.7 million outstanding ordinary shares of Draka at a price of €15 per share, subject to certain conditions.

Draka shares ended at €15.57 Monday on the NYSE Euronext Amsterdam, almost 4 per cent higher than the Nexans' offer price.

Nexans' chief executive officer Frederic Vincent said, " The contemplated transaction would contribute to the consolidation of the cable sector, improve the competitiveness of Nexans' European asset base, and reinforce its positions in specialty cables."

" The financing to be put in place for this transaction would ensure keeping a sound financial structure for the Group," Vincent further said.