Swedes Plot £1bn Swoop For UK Manufacturer
Another slice of Britain's industrial base is poised to fall into European hands with a near-£1bn takeover of Edwards Group, a Sussex-headquartered high-tech manufacturer.
Sky News can reveal that Edwards, which is listed on New York's Nasdaq stock exchange, is in advanced talks about a takeover by Atlas Copco, a major Swedish industrial combine.
A deal for Atlas Copco to buy Edwards could be announced as soon as next week, according to banking sources in the US.
Although it is not quoted in London and specialises in making products such as high-pressure vacuum pumps which are unfamiliar to the general public, the deal will nevertheless be closely-watched in Britain.
Edwards' takeover by Atlas Copco will follow a recently-agreed £3.4bn deal for Schneider Electric of France to buy Invensys, another British manufacturing stalwart.
Edwards employs hundreds of people at its Crawley head office and manufacturing facilities and is widely-held to be among the world's most advanced companies in its field. Its products are an important component in the supply chains of flat-screen television and solar cell manufacturers.
Vince Cable, the Business Secretary, would be alarmed if the deal was predicated upon the closure of any UK facilities but such a move from Atlas Copco was unlikely, said one banker.
Wall Street insiders said the Swedish group, which has a market capitalisation of more than £20bn, planned to offer around $9.20-a-share for Edwards, a healthy premium to the $8 at which it listed on Nasdaq last year.
It is unclear whether Edwards' board has formally voted to approve the bid, but insiders said that investment bankers at Barclays and Lazard, who are advising the British-based company, had recommended that it should do so.
Edwards opted for a listing on Nasdaq over London last year after concluding that it would achieve a higher rating for its shares if it went to the US, and next week's deal will signal the end of its brief tenure on the technology-focused exchange.
A supplier of vacuum pumps to the world's largest semiconductor manufacturers, Edwards was spun out of the BOC gases group after it was acquired by Linde, a German rival, in 2006.
Large chunks of Edwards' shares are still held by CCMP Capital and Unitas, the two private equity firms which acquired it from BOC.
Edwards had a market value of just over $950m (£608m) at Friday's closing share price of $8.45.
The offer from Atlas Copco, which is larger than Electrolux and Volvo, two other big Swedish manufacturers, is expected to crystallise another big financial gain for CCMP and Unitas.
It will also add another dimension to the Stockholm-based company's operations, which include making machines for the mining industry, air compressors and power tools.
Edwards employs more than 3000 people around the world, although it has shifted some jobs from the UK to lower-cost manufacturing sites overseas, including in Asia, recently unveiling plans for a vast factory in China's Shandong Province.
The company is now chaired by Nick Rose, a former finance director of Diageo, the drinks company, who is on the boards of BAE Systems, BT Group and Williams Grand Prix Holdings, the owner of the Formula One team.
Atlas Copco's bid comes six months after Edwards named Jim Gentilcore, who already sat on the company's board, as its chief executive, replacing former Jaguar Land Rover and JCB executive Matthew Taylor.
It was unclear on Saturday whether Mr Gentilcore would remain in place if the takeover of Edwards is completed.
Neither Atlas Copco nor Edwards could be reached for comment.