Cytec buying Umeco for £275m

UMECO, which makes materials for Formula One cars, is to be sold to speciality chemicals maker Cytec Industries for £275m.

Umeco, which also supplies aerospace parts, is being sold for 550p a share, a 46 per cent premium to Umeco stock’s closing price on Wednesday.

Umeco shares closed at 551p last night.

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The boards of both companies have unanimously approved the transaction.

Cytec said it had received commitments from Umeco’s top three shareholders, BlackRock, Hermes and Aberforth, to vote in favour of the deal.

Analysts said US-based Hexcel Corp, which makes carbon fibre and other composites, could also make an offer for Umeco.

N+1 Brewin analyst James Tetley said: “If there were to be a counter bid, Hexcel would be the likeliest candidate, but in our view this is likely to prove a knockout bid.”

Umeco, which counts Boeing, Airbus and BAE Systems among its customers, employs around 50 staff at its process materials Aerovac factory in Keighley, West Yorkshire.

Cytec said the acquisition, expected to close in the third quarter, would immediately add to its earnings. It will be financed using cash.

Cytec’s chief executive Shane Fleming said: “The acquisition greatly improves our composite presence in the industrial sector. The acquisition also enhances our near-term composite capacity while we complete capital investments.”

Cytec did not expect “significant” workforce reductions resulting from the transaction, but hinted at closing Umeco’s head office in Warwickshire.