British buyout firm Melrose in talks to buy Germany's Elster Group for $2.3 bn

18 Jun 2012

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UK's manufacturing buyout firm Melrose Plc is in talks to buy Germany's utility metre maker Elster Group SE for $2.3 billion, the two companies today said in a statement.

The announcement comes four months after London-listed Melrose walked away from acquiring Irish welding equipment manufacturer Charter International for $2.2 billion after it was outbid with a $2.4 billion offer from Colfax Corp.

Melrose said that it is currently conducting due diligence and it would not proceed  with the transaction without the board of Elster and its largest shareholder Rembrandt Holdings S.A.- owned by funds advised by CVC Capital, approve the deal.

CVC Capital's 62-per cent stake in Elster came through its September 2005 acquisition of Elster - formerly Ruhrgas Industries - from the German utility group E.ON, and listed the company on the NYSE in September 2010.

Melrose will fund the proposed deal through a combination of new debt and a fully underwritten rights issue to its shareholders.

Incorporated in Germany and listed on the New York Stock Exchange, Elster is a leading engineering company and one of the world's largest providers of gas, electricity and water meters, gas utilisation products and related communications, networking and software solutions.

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