Tire manufacturer Michelin has offered to purchase British conveyor belt manufacturer Fenner PLC for approximately £1.7 billion, Bloomberg reported.
Michelin said in a statement that Fenner's shareholders will receive 610 pence per share, giving the target an enterprise value of about £1.3 billion. The prices represent a 24% premium over Fenner's closing price March 19. Shareholders will also be eligible to receive a dividend of 2.1 pence per share, expected to be declared around April 25, according to Bloomberg.
The deal is designed to strengthen Michelin's presence in the mining equipment market. The buyer will combine its tire and conveyor belt operations with Fenner's.
In addition, Michelin said Fenner's polymers will allow the French company to break into the reinforced polymers market.