Wendel to pay off debts with €1.5bn Deutsch sale

Marion Dakers
SHARES in French investment firm Wendel rose 16 per cent yesterday after it said it was in exclusive talks to sell its Deutsch Group electronics business to TE Connectivity for €1.55bn (£1.3bn).

Wendel is selling the firm it bought in 2006 to help cut its debt pile, which stood at almost €5bn in August. The group said net proceeds from the deal would be around €954m.

The deal, expected to close in early 2012, represents a capital gain of €575m on Wendel’s original investment.

US-based Deutsch, founded in 1938, makes interconnectors for defence, civil aerospace, cars, offshore and recreational vehicles.

The company has over 3,600 employees in more than 25 countries, and is expected to generate revenue of about $670m in 2011.

TE Connectivity, which makes over 500,000 electronic components for the automotive and communication industries, expects the deal to add to its earnings by about 20 cents a share in fiscal 2013, excluding acquisition-related costs. The company had annual revenue of over $14bn for fiscal 2011.

Wendel still has holdings in several European industrial companies, including Saint-Gobain, Stahl and Legrand.

Switzerland-based TE Connectivity said it will fund the transaction equally via cash and new debt.

Linklaters and Ondra Partners are advising Wendel on the deal.