Glynwed to buy out Victaulic

Glynwed is adding Victaulic to its diversified collection of engineering companies - paying almost pounds 145m in cash and shares for the pipe and fittings manufacturer.

The agreed deal was well received. Shares in Glynwed eased 8p to 325p. Glynwed is offering three of its shares plus 329p in cash for every four shares held in Victaulic. The terms value each Victaulic share at 326p against yesterday's stock market price of 323p, up 48p. Gareth Davies, chairman of Glynwed, said: "The enlarged group will be able to offer wider, complementary product ranges, access to new markets and broader geographical coverage."

The takeover comes at a time when Victaulic is struggling to offset the fall in orders from British Gas for pipes and fittings. David Stewart, managing director of Victaulic, yesterday warned that a shortfall in sales would hit current year results. However, good progress had been made in reducing the company's dependence of the UK gas and water industries.

In contrast, all of Glynwed International's businesses at the end of the first quarter were well ahead of last year. The company added yesterday that it was on course for another significant increase in earnings this year.