Danfoss Offers to Buy AC-Drive Maker Vacon in $1.34 Billion Deal

Danfoss A/S, a Danish maker of refrigeration parts, offered to buy Vacon Oyj, a Finnish producer of air conditioner drives, for 1.04 billion euros ($1.34 billion). Vacon shares jumped above the offer price.

Danfoss, controlled by Danish billionaire Joergen Mads Clausen, will pay 34 euros a share, the Nordborg, Denmark-based company said in a statement today. The offer price is a 13.1 percent premium to Vacon’s closing price of 30.06 euros yesterday.

Danfoss is making the offer to ensure its “strategic focus on creating profitable growth,” it said. Vacon is a “good match” to this ambition and Danfoss will combine the two companies’ AC drive units, it said.

Vacon shares rose as much as 25 percent, the most in 14 years, in intraday trading. The stock was up 14 percent at 34.30 euros at 10:35 a.m. in Helsinki.

The Finnish company’s board unanimously recommended shareholders accept the offer. Danfoss said it has agreed to buy a 10.56 percent stake from Vacon’s biggest shareholder AC Invest Three BV, and owners representing 14.32 percent of shares have undertaken to accept the offer.

In a separate statement today, Vacon said it lowered its full-year forecast. The company expects an “increase” in 2014 revenue and operating-profit margin excluding one-time items. It had previously forecast sales growth of as much as 15 percent and a profit margin at as high as 13 percent.

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