Honeywell International, Inc. has announced the acquisition of gas measuring and metering company, Elster, from Melrose Industries Plc for approximately £3.3 billion or $5.1 billion, according to a press release by Honeywell.
The acquisition gives Honeywell, a company that provides technology and manufacturing of aerospace products, control systems, and performance materials, access to Elster's gas and metering business, allowing the company to increase its own business profile globally.
"The acquisition of Elster will generate strong future returns for Honeywell's shareowners because it increases our growth profile globally, creating both organic and inorganic growth opportunities," Dave Cote, Chairman and CEO of Honeywell, said in Honeywell's press release.
"Elster has outstanding technologies, brands, energy efficiency know-how, and global presence, all of which we are very well-positioned to build on," he added. "Elster also creates a new platform for acquisition targets for Honeywell that will be additive to the business' growth and global presence."
The acquisition also allows Honeywell to improve value to its customers with "technology and lifecycle management solutions for industrial end users" Cote continued in Honeywell's press release.
A press release by Melrose Industries states that the proceeds of the deal would be used to return a capital of over £2 billion to its shareholders in due course and for general corporate purposes, which include paying down existing borrowings.
Christopher Miller, Chairman of Melrose, is pleased to have forged the deal earlier than expected.
"I am pleased that we are able to deliver this return to shareholders earlier than we had originally anticipated and have every confidence that Elster will continue its success story under the ownership of Honeywell," he said in Melrose Industries' press release.
Reuters adds that the market had expected the business to be sold in parts.
"I think we've always said that, if an opportunistic bidder comes along and offers tomorrow's price today, we will talk to them," David Roper, Vice Chairman of Melrose Industries said to Reuters.
The deal, which is anticipated to close in the first quarter of 2016, is expected to have a minor "dilutive impact" in Honeywell's 2016 Earnings Per Share, according to Honeywell's press release.
