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News > Deals
B.F. Goodrich buys Coltec
November 23, 1998: 7:43 a.m. ET

Aerospace parts makers combine in $2.2B deal to form industry giant
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NEW YORK (CNNfn) - Aerospace parts maker B.F. Goodrich agreed Monday to merge with rival Coltec Industries Inc. in a $2.2 billion deal that will create an industry powerhouse.
     Under terms of the deal, already approved by both companies' boards, Coltec shareholders will receive 0.56 shares of B.F. Goodrich common stock.
     Based on B.F. Goodrich's closing price of $35.94 on Friday the transaction is currently valued at $20.13 per Coltec share.
     The transaction, which includes the assumption of Coltec debt, will be accounted for as a pooling of interests and will be tax free to Coltec shareholders.
     The deal, which should add to earnings next year, is expected to be complete by next spring.
     B.F. Goodrich (GR) said it expects to achieve minimal annual cost savings of about $60 million by 2001.
     "This merger significantly enhances B. F. Goodrich's aerospace business and -- with Coltec's high-margin engineered industrial products business -- we are adding an important third leg that balances our aerospace and performance materials portfolio and enhances our excellent prospects for continued growth, " said David L. Burner, chairman and chief executive officer of B. F. Goodrich.
     "In aerospace, the combination will increase our ability to meet customers' increasing demand to partner with suppliers who can offer more products and more fully integrated systems," he said. "We expect also to achieve meaningful synergies in serving the primary and aftermarket segments of the industry."
     Combined, the companies have 1998 pro forma revenues of about $5.5 billion and a market capitalization of approximately $4 billion.
     Current B.F. Goodrich shareholders will own approximately two-thirds, and Coltec shareholders one-third, of the combined company.
     Headquarters of The B.F. Goodrich Co. will relocate to Charlotte, N.C.
     Coltec Industries is a leading producer of aerospace and industrial products and is based in Charlotte, NC.
     In January, B.F. Goodrich agreed to buy Freedom Chemical Co. in a $375 million cash deal that marks the company's eighth acquisition of a specialty chemicals maker in the past two years.
     Shares of Coltec (COT) finished up ¾ at 17-15/16 Friday on the New York Stock Exchange. Back to top

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