Danfoss has offered $1.5 billion to acquire Vacon in an effort to boost its electronics division.
The Danish engineering company has offered the Finnish drive AC drives maker shareholders approximately $48 a share in cash, with a premium of 13.1% from its closing share price last week, according to the Wall Street Journal.
The deal has been fully supported by the Vacon board.
“By joining forces the two companies will create a Nordic-based, global player—a new AC drives business with the clear ambition to build a leading position in the AC drives market,” Vacon chair Panu Routila said.
According to Danfoss the offer is part of the company’s strategic focus on creating profitable growth, and based off the fact that both Danfoss Power Electronics and Vacon are significant players in the AC drives market, and this merger will create a stronger position.
“We have a clear strategic ambition to be one of the absolute top players in the businesses where we operate. Vacon is a very strong and innovative player and by creating this new drives business we can ensure a strong long-term growth trajectory,” Niels B. Christiansen, Danfoss’ CEO, said.