Office-product firm 3M (NYSE:MMM) announced today that it has reached an agreement to buy ceramics manufacturer Ceradyne (NASDAQ:CRDN) — a move the company says will complement its existing businesses in transportation, energy and defense.
3M will buy Ceradyne for a total of roughly $860 million, valuing the company at $35 per share — a 43% premium to CRDN’s price at Friday’s close.
3M estimates the deal will reduce about 5 cents per share in earnings for the first year after the transaction; excluding costs and one-time items the merger will add 1 cent on an adjusted basis.
Ceradyne’s board of directors has unanimously recommended that CRDN shareholders accept the offer; the offer will be subject to the tender of a majority of Ceradyne’s shares and to certain other customary closing conditions.
The transaction is expected to close during the fourth quarter of this year.
— Kyle Woodley, InvestorPlace Assistant Editor