28th Jul 2015 07:13
LONDON (Alliance News) - Melrose Industries PLC on Tuesday said it has sold its Elster business to US industrial conglomerate Honeywell International Inc for GBP3.3 billion in cash.
FTSE 250-listed Melrose said that in addition to the cash consideration, Honeywell will assume its FKI UK defined-benefit scheme and the McKechnie defined benefit pension plan, along with Elster's pension obligations, which together comprise the majority of the pension schemes on Melrose's books.
Melrose is planning to use the consideration for the Elster businesses to return more than GBP2 billion to its shareholders and for general corporate purposes, including paying down its debt obligations.
"The disposal of Elster represents an excellent outcome for Melrose shareholders and another milestone in our track record. Through investing heavily and improving operational performance we have created substantial value for shareholders, more than doubling their money in three years," said Chairman Christopher Miller.
The news of the disposal came at Melrose posted its results for the six months to the end of June, with a pretax loss of GBP13.4 million compared to a GBP13.2 million profit a year earlier, as revenue for the group dropped to GBP117.7 million from GBP164.5 million. The results include only Melrose's Brush division, as it is now its only continuing business.
The company said it will pay an interim dividend of 2.8 pence per share for the half.
By Sam Unsted; [email protected]; @SamUAtAlliance
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