Contract electronics maker Solectron has boosted its presence in Asia and the Pacific with the announcement of its intention to buy Singapore’s NatSteel Electronics for approximately $2.4 billion in cash.
Solectron, the world’s biggest maker of outsourced electronics, said it would pay $4.53 for each share in NatSteel, Asia’s biggest contract electronics maker.
The price is a 74 percent premium over the closing price of NatSteel Electronics stock in Singapore.
The deal is Solectron’s biggest purchase of an electronic manufacturing services company and will strengthen Solectron’s presence in Europe and the Americas as well as Asia, the company said.
The purchase comes less than two weeks after Solectron gained a foothold in two important production bases for the electronics industry: Japan and Taiwan.
Japanese electronics company, Sony said it would sell two plants and outsource production of some devices to Solectron.
Solectron shares closed off $3-7/8, or 8 percent, at $44-1/16. The stock was among both the most active issues and the biggest percentage losers on the New York Stock Exchange.
Solectron expects to pay for part of the purchase through a public offering of common stock and through zero-coupon liquid yield option notes.
An Ingalls & Snyder analyst said Solectron was gaining important capacity and experienced management in a surging industry. NatSteel Electronics has about 12,000 employees and more than 2.3 million square feet of manufacturing capacity in 11 sites around the world.