Page last updated at 09:21 GMT, Tuesday, 23 March 2010

VT agrees to 1.3bn Babcock bid

Devonport dockyard, the facility which maintains and refuels the Royal Navy's submarine fleet
Babcock International provides support to the Navy's submarine fleet

Defence services company VT Group has agreed to a takeover deal worth £1.33bn ($1.9bn) from Babcock International.

The former Vosper Thornycroft, which had initially rejected Babcock's attention, said the cash-and-shares offer was "fair and reasonable".

The merged companies will form a support services powerhouse.

VT said Babcock's offer was good for VT shareholders, who will receive 361.6p in cash and 0.701 new Babcock shares for each VT share they hold.

'Attractive proposition'

Although VT had rejected Babcock's earlier approaches, it had faced increasing pressure from its shareholders to do a deal.

"The VT board believes that Babcock's offer represents an attractive proposition for VT shareholders," said VT chairman Mike Jeffries, announcing the deal.

The acquisition of such a high quality and complementary business is in line with our strategy to be the leading engineering support services company in the UK
Mike Turner, Babcock chairman

He said it was attractive "both through the immediate offer premium and through the opportunity to benefit from the synergies available from combining our two businesses".

Babcock, which employs about 17,000 people worldwide, says it has identified roughly £50m in cost savings following the deal, through synergies in areas where the two companies overlap.

The merged group has been valued at about £2bn by analysts.

"The acquisition of such a high quality and complementary business is in line with our strategy to be the leading engineering support services company in the UK," said Mike Turner, chairman of Babcock.

VT was once a naval shipbuilder and is now a support services firm.

It had recently made a bid to buy UK infrastructure company Mouchel, but was forced to drop that when it was then the subject of Babcock's approaches.



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SEE ALSO
VT opens bid talks with Babcock
04 Mar 10 |  Business
VT Group snubs new takeover offer
18 Feb 10 |  Business
Defence firm rejects bid approach
15 Feb 10 |  Business
VT sells 380m shipbuilding stake
28 Jan 09 |  Hampshire

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