One of Britain's oldest security companies, Chubb, has agreed to a £620m takeover bid from the US conglomerate United Technologies Corporation, which makes Pratt & Whitney aircraft engines, Sikorsky helicopters and Otis lifts is offering 75p a share plus a special 1p a share dividend.
UTC, Chubb, which held abortive merger talks with Sweden's Securitas last year, announced in the spring it was in takeover talks but warned subsequently that profits would be hit by the economic impact of the Sars virus in Asia and the slowdown in the hotel refurbishment market in the US.
Last year Chubb, which has been making security devices for 185 years, made a profit of £110m.
Yesterday chief executive Jonathan Findler said that the decision to back the offer was "all down to value for shareholders". Chubb was able to remain independent but the 76p a share in cash "offers share holders better value in the medium term than running the business on a standalone [basis]."
The link with UTC would provide Chubb with access to greater resources as well as links with UTC's commercial buildings applications companies such as Otis, he said.
In return UTC will get one of the best known names in the security industry and put it among the leading companies in areas such as electronic hotel locking systems, security guard and burglar alarms.
George David, UTC chairman and chief executive, described Chubb as a perfect fit. "Most of all, we like the overlaps in our customer populations. UTC already sells to exceptionally high numbers of buildings in the world, and Chubb's installations will both overlap with and augment this large presence. We see lots of potential for synergies among Otis, Carrier and Chubb. We like this deal a lot."
Chubb shares closed up 2.5p at 75p.
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